David Cameron seeking action on tax avoidance at EU summit

David Cameron in Brussels Mr Cameron is calling for a US-style cross-border tax information exchange

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David Cameron is urging EU leaders to back global action against tax evasion and "aggressive" tax avoidance that is causing nations "staggering" losses.

The prime minister is meeting his European counterparts in Brussels to discuss ways of cracking down on those who do not pay their fair share.

It comes amid a row over the tax paid by firms like Google and Amazon.

The CBI has warned politicians not to "moralise" about tax or rush to judgement without the facts.

The business lobby group said paying tax was not "optional" and that firms must make "responsible judgements" with the interests of their shareholders, stakeholders and society at large in mind.

'No absolutes'

But it warned politicians against engaging in a "moral debate" over the issue and said they must consult with business before introducing any new rules.

"As politicians pursue fairness it is important that any criticisms are grounded in fact and hasty solutions or political point-scoring do not trigger long term unintended consequences," the organisation's chairman Roger Carr said.

"Tax avoidance cannot be about morality - there are no absolutes."

He urged Mr Cameron and other leaders "to fix the rules internationally, not unilaterally", adding that "independent action can cost competitiveness and cause confusion".

Start Quote

Talking tough on tax, whilst continuing to usher a third of the world's wealth into UK tax havens, risks making a mockery of David Cameron's leadership at the G8 Summit in June”

End Quote Oxfam

The taxation issue is on the agenda of the latest EU summit - which will also discuss energy policy - at the request of the UK, France and Germany.

Mr Cameron wrote to EU leaders ahead of the meeting urging a US-style cross-border tax information exchange. The UK, Germany, France, Spain and Italy are currently testing such a system and want to launch it by the end of the year.

Mr Cameron also wants G8 and EU meetings to include country-by-country reporting of where companies pay their tax.

As he arrived at Wednesday's meeting, the prime minister said competitive tax rates were vital for securing investment but firms must abide by the rules.

"That means international collaboration, sharing of tax information," he said. "It is important that we make sure we act together to make sure we do everything on this agenda."

The BBC's Europe Correspondent Matthew Price said there was "growing unity" about the issue across the EU, with an estimated one trillion euros lost every year due to individuals and companies not paying as much tax as they could do.

But Labour leader Ed Miliband has accused the prime minister of not backing up his rhetoric with "concrete proposals" and said a future government led by him would be prepared to act on its own in the UK.

Low-tax regimes

After the four-hour summit, Mr Cameron will travel to Paris to meet French President Francois Hollande at the Elysee Palace where co-operation on tax evasion and avoidance as well as tackling corporate secrecy will again be on the agenda.

The meetings come two days after Mr Cameron wrote to 10 British overseas territories and crown dependencies, including the Cayman Islands and the Isle of Man, urging them to "get their house in order" and sign up to international treaties on tax. Critics claim such places, which operate low-tax regimes, are used by companies for tax avoidance or evasion.

Google chairman Eric Schmidt The party leaders have been under pressure to raise the issue with Google boss Eric Schmidt

Tax avoidance, where companies operate within the rules to avoid paying taxes, and tax evasion, which is outside the law, have risen high on the political agenda in recent months.

High-profile companies like Google, Amazon and Starbucks have faced criticism in the UK for the low levels of tax they appear to pay compared with the size of their businesses.

Speaking on Wednesday, Mr Miliband accused Google of going to "extraordinary lengths" to limit UK tax payments.

'Cat and mouse'

Deputy Prime Minister Nick Clegg said it was unsurprising that firms were trying to exploit the "crack and crevices" of national tax laws and said he had raised the issue with Mr Schmidt at a Downing Street reception earlier this week.

The government was reducing corporation tax, he said, and, in return, it expected firms to pay their fair share of tax.

He acknowledged individual countries' tax systems were often "arcane" and were struggling to keep pace with "disembodied" businesses operating across national borders.

"We have got to make sure the rules apply much more evenly and strictly across the piece and so big companies cannot play cat and mouse with different national tax administrations," he said.

Apple boss Tim Cook defended the firm's practices when he appeared before the US Congress on Tuesday, insisting it complied with both the letter and the spirit of the law.

Oxfam, meanwhile, has suggested people using tax havens are depriving the world of more than £100bn in lost revenue.

"Talking tough on tax whilst continuing to usher a third of the world's wealth into UK tax havens, risks making a mockery of David Cameron's leadership at the G8 Summit in June," its head development finance and public services Emma Seery said.


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  • rate this

    Comment number 81.

    53. Brian S
    You are talking rubbish man.
    How do you stop a company digging oil in one country, selling the oil to its distribution company in another who makes the profit and then redistributing it to the worlds other countries for no real profit?
    It is near impossible to stop. This is not as you think a little England problem. It is global. Some people are just too simple to work out the problem

  • rate this

    Comment number 80.


    I have put the tick in the box at 97 with big hopes and regretted it ever since, I have some sympathy for your hope but until Labour is rid of its trough watchers and think tanks nothing is going to change especially if we keep voting in hope.

    The working class need to supplant the new labour model so representation returns, hopefully the TUC will sort that one out soon.

  • rate this

    Comment number 79.

    This is surely spin at its worst.If you build a dam and leave a hole in it the water will go through the hole If you pass a tax law with a getout people will use the getout.We pay the top bosses at HMRC an enormous amount of money which they seem to be taking without delivering the goods!Time for heads to roll?Or are the law passing politicians themselves benefiting from the loopholes?

  • rate this

    Comment number 78.

    Tax laws could be changed tomorrow without any international agreement for operations, like Google, that simply sell into the UK market. They have nowhere else to go if they want the business. But the manufacturers located in the UK that export can re-locate if our tax rates are not competitive and we lose all. Time for smarter taxes.

  • Comment number 77.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 76.

    If the gov can tax us mere mortals to the hilt why cannot this be used for the mega rich and the big business people , I am tired of hearing about how they will all head off to other countries , its all pals together it seems to me , like we cannot close our borders etc why the hell not !! we need a gov who will look after this country but then all our manufactoring has gone sold off why .

  • rate this

    Comment number 75.

    This is populist political posturing by Cameron.

    Nothing more. Nothing less.

    It won't change a thing.

    All he really needs to do is ensure the UK taxation system is overhauled to close loopholes (& use revenues responsibly).

  • rate this

    Comment number 74.

    20 Minutes ago
    Question: How much tax does the royal family pay?

    theres a wiki article on the ins & outs of their finances including tax
    the simple answer is a much higher proportion of earnings than some corporations are paying..

    So actually their tax is a voluntary tax as well.

  • rate this

    Comment number 73.

    Ed "I have no conrete proposals" Miliband accuses DC of having no concrete proposals - hilarious.

    Politicians have found a bandwagon and jumped on it. They have shown that they have no ability or no interest to take the time to understand how corporation tax works. But then again, judging by how many times BBC refers to Google or Amazon sales in UK, the BBC cannot be bothered either

  • rate this

    Comment number 72.

    We need to understand how and why these loopholes exist.

    Gordon Brown added thousands of pages to our tax laws and this didn't work. So we need to work out why and take a different approach.

    How about assuming that any new tax avoidance scheme has to be approved by HMRC first, before it can be regarded as legal?

    Then they can close the loopholes before we lose any tax through them.

  • rate this

    Comment number 71.

    Taxes is taxing at best of times.
    Any company have a tax advisor or a accountant, with an obligation to tell the client " how to work the tax rules", so if MP´s do not like these rules- they got an obligation to have the civil servants rewhrite the rules, so why have they not done THAT?
    (Over paid? or just not interested?)

  • rate this

    Comment number 70.

    Regional town and community businesses who paid taxes fairly have been destroyed by big businesses unfairly deploying fancy tax avoidance schemes, thereby robbing the tax payer into the bargain.
    The Government can moralise all it likes at the imbalances voracious big businesses have visited on our National economy and Towns and Communities across the globe, not just in the UK.

  • rate this

    Comment number 69.

    Avoiding paying tax or not paying enough tax.


    A government using the taxes it gets immorally on such things as illegal wars, providing arms to rebels to over throw governments, to give as foreign aid to countries that don't want or need it or to back fill black hole debts built up due to gross financial mismanagement.

    Which is worse?

    Hands up who likes paying the taxes they do?

  • rate this

    Comment number 68.


    Limited Liability Partnerships, so no matter how much they screw up their audits none of the 'partners' are liable. Wonderful for them, lousy for us. LLPs are hugely useful as tax avoidance vehicles. Ban them.

    Spot on it seems the culture of irresponsibility was set off by this, the argument being unlimited liablity would stifle risk taking, we can see where thats all ended. !!!

  • rate this

    Comment number 67.

    The simple answer would be to tax at the point of sale but then the global corporates would simply put the price up and pass it onto the consumer. Not an easy one to solve but more should be done. Perhaps the EU's transaction tax is not so silly afterall as it would stop them moving the money around.

  • rate this

    Comment number 66.

    Would the person who downrated my comment @52 care to explain the reasoning.

  • rate this

    Comment number 65.

    Taxation and spending, redistributing wealth, destroys wealth creation, and impoverishes a nation. Even Churchill said no nation can tax itself into prosperity. Our socialism is failing, as it always does.

    You are correct, I am saying precisely that.

    You propose to make tax avoidance, which is minimising one's tax legally, a terrorist crime?! Yikes! You're a Stalin!

  • rate this

    Comment number 64.

    It not an EU problem its a Global problem. Companies are in the firing line today but the real wealth is privately owned. Once money is offsored into tax haven everyone neeeds to stop it returning to the Globe.

    There needs to be the taxed money free to work as a medium of exchange and the untaxed needs to be devalued to stop this behaviour.

    Money as a non asset

  • rate this

    Comment number 63.

    Dave is urging EU leaders to back global action against tax evasion.
    So what exactly is this action Dave? Are you going to support the Robin Hood Tax. I doubt it. What about a chat with your business mates and the all important shareholders. Next you can give a speech, one that starts "Let's be clear" we are going to do something in 2016.
    Let's be clear - your not going to do anything are you.

  • rate this

    Comment number 62.

    So far out of the big companies publically mentioned the majority are US companies. Sir Roger Carr as chairman of Cadbury sold it off to Kraft he was involved with two other companies prior to that both sold off to American companies and next he is headed to BAE which has huge American interests.
    Now he is warning the government about immoral tax aviodance as chair of the CBI, please keep out.


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