TECHNOLOGY companies must stop “extremely aggressive” tax planning that “push the boundaries of what is legal”, Pascal Saint-Amans, the OECD’s director of tax policy, has told the BBC.
Saint-Amans, who runs the OECD’s Centre for Tax Policy and is responsible for reforming global tax rules, said there should be international agreement on new tax laws ahead of the G20 summit of global leaders in November.
The rules, which crack down on profit-shifting by multinational companies, should be in place “well before” 2020 and will require companies to pay more tax in the countries where they sold goods or created revenues, he told the BBC.
And, according to Saint-Amans, that should mean technology companies such as Facebook, Apple and Google paying more tax to the UK Treasury.
They will also be required to pay more tax in a number of other countries and publish how much they pay on a country-by-country basis.
“My advice would be instead of focusing on tax planning, please do the wonderful job you are doing on innovation and be much more conservative on tax planning.
“They have been extremely aggressive and that may have sounded unfair to the audience – that you have giants making billions in profits and not paying taxes where they operate.”
The UK has already decided to implement its own tax on diverted profits – popularly dubbed the ‘Google tax’. Appearing via video link before Australia’s Economics References Committee last month, said Britain’s decision to implement the 25% levy could undermine the project.
“You will be better informed with better instruments and with a lesser risk of having disruptive actions, which might push other countries… to take unilateral measures, which are not that great when you are negotiating a multilateral package,” he told the committee.
In his interview with the BBC, Saint-Amans said the UK rules will have to be “co-ordinated” with the OECD agreements.