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
    +6

    Comment number 281.

    274.Jaw dropping truth

    You should thank your lucky stars you live in a society which both protects and provides for you. Without it natural selection would have killed you off years ago.

  • rate this
    -2

    Comment number 280.

    LOL, so whats he going to do about British territorys that are STILL tax havens.

    Ireland has some of the most "attractive" tax levels which attracts so many corporates to avoid UK tax.

    Shouldnt Cameron be asking Salmond to declare that an independent Scotland would not further undermine UK tax by offering similar tax system as Ireland, do it before the horse has bolted.

  • rate this
    +8

    Comment number 279.

    so the tories want to go after tax avoiders. thats funny since most of the cabinet avoid tax(legally) . But it will be half hearted and in a couple of years they will say it has not been a success and drop it. if they spent as much on tax avoidance as they do chasing benefit fraud we will see massive returns £75bn acording to the PCS.

  • rate this
    +4

    Comment number 278.

    The solution to this problem is two fold either make the laws and regulations tighter or abolish the tax on profits altogether and just take 2% of turnover. This will stop all the profit manipulation, offshore invoicing of cost of sales and the movement to gross margin to low tax countries. The basic principle should be: If you sell here you pay tax here and its 2%.

  • rate this
    +3

    Comment number 277.

    As any MP knows, if you make a large part of your salary an expense claim you do not have to pay tax and NI on it. These companies do it on a bigger scale, but lets have everyone in it together and all pay our fair share.

  • rate this
    +1

    Comment number 276.

    Correct me if I'm wrong:

    IF you were an organisation...and you could operate anywhere in the world...

    Would you keep your organisation in the UK, where by itself, tax reforms were made (higher taxes etc.) or would you simply move to another country in the EU or the world where taxes were lower?

    Correct,business won't run away but it will have an effect. International co-operation is needed 1st.

  • rate this
    +1

    Comment number 275.

    All EU countries should have a consistent approach on tax matters. It's not acceptable for Ireland for example to be looking for financial bailouts when they keep low levels of corporation and income tax. But you can't blame firms for minimising their legal tax burden; governments are to blame for creating these loopholes, and now they're trying to pretend it's nothing to do with them..

  • rate this
    -9

    Comment number 274.

    268. Ex Tory Voter

    Let us look now at Selfishness which is the most ? The hard working tax payer fleeced to the skin after 50 hours hard graft, Or the swing-the -lead fakers raking in the Benefits ? The Idle Socialist elite who never has worked and produces kids for Benefits for a living ? The Rabid supporters of the policy that supports the money with menace ( tax ) from these worker. ?

  • rate this
    +5

    Comment number 273.

    Why doesn't he just do the decent thing and instead of merely making lots of noise about tackling tax avoidance he actual DOES SOMETHING about it....????

    The UK Govt. provide political cover for more tax avoidance scams than any other nation on earth.....

    ....just shut all OUR tax havens down.....

  • rate this
    0

    Comment number 272.

    270.
    grumpysleepless

    I lay in bed getting benefits from the workers.

    I am investor, so get out there and work harder to increase my dividends and capital.

    Not much difference really, between someone out of work and me except I get more for doing nothing

  • rate this
    +4

    Comment number 271.

    I suspect the 'pushing' will be very light and sporadic. Just enough until this all quiets down and the large donors to political party funds and other dubious areas can breathe again.

    Political suicide .... I should say so.

    This will NEVER HAPPEN.

  • rate this
    -3

    Comment number 270.

    Socialists want everything for nothing, but want us hard working Brits to pay for it,while they stay in bed until its time to get up to claim their benefits.

  • rate this
    -1

    Comment number 269.

    You'd have thought Dave, being the well-educated soul that he is, would have realised by now that politicians don't tell the private sector what to do or how to behave.

  • rate this
    +3

    Comment number 268.

    "264.Jaw dropping truth"

    Unbelievable, is there nothing that some won't try and twist to justify their own selfish ends. Are you IDS per chance?

  • rate this
    +2

    Comment number 267.

    Too little too late from the bucket of ineptitude.

    This has been allowed to go on by successive Governments but Mr Cameron is barking up the wrong tree if he thinks he can singlehandedly tell the EU what to do. Especially when he doesn't want us to be in Europe.

  • rate this
    0

    Comment number 266.

    @254.
    cheeryAllyj


    Hands up who has an Apple product, bought off Amazon, uses google ?
    Lets also start Shaming YOU then as you are supporting this so called messed up tax shambles. Last time I checked no one forced anyone to buy from these companies so STOP doing it!

    Admit i was given an Amazon voucher, don't use Apple or Google, try this search engine. !!!

    https://duckduckgo.com/

  • rate this
    0

    Comment number 265.

    @249 Vegraj "............unless you want anarchy. !!"
    ---------
    I was pointing out how silly the principal is in taxation. As far as anarchy goes...we have turmoil & unrest sitting below the surface. I am not the only one who sees that and who is concerned. The gov't, in whole or in part, is wasteful and inept.

    Democracy carries within it the seed to its own destruction. (Anon.)

  • rate this
    -8

    Comment number 264.

    257. Ex Tory Voter

    passed fit for work by Atos who then died within 6 weeks.

    Well 2 things in life are sure Death an Tax we cannot do much about death. However their is a sudden death or a slow taxed-to-death demise which it seems these boards full of Socialist's is their idea of they right way to treat the hard working tax payers. Why are they so Morally Bankrupt not to see its Theft ?

  • rate this
    -2

    Comment number 263.

    'Pay more tax, Miliband tells Google'
    ---
    This from a man who spent time in a govt which in 13 years more than doubled the size of the UK tax code. Can one of his aides take this guy to one side & gently explain to him the correlation between tax system complexity and scope for avoidance?

  • rate this
    -3

    Comment number 262.

    224. C Turner
    3% Turnover Tax on all UK sales for the likes of Google and Starbucks and other Multinationals."

    a) what defines a 'multinational'?

    b) what's to stop the USA, for instance, charging a 'turnover' tax on UK companies selling there - extra paperwork, fees etc for UK exporters

    c) Your idea would increase prices by 3%, pushing up inflation across the board.

 

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