G8 speaks out over tax evasion, little new action planned

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G8 speaks out over tax evasion, little new action planned

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The G8 summit in Northern Ireland saw the world’s richest economies promise to be tougher on fighting tax evasion and money laundering, but there was no pledge to create registers of who really owns and profits from companies and trusts to make sure they pay tax and are not fronts for criminals.

Host David Cameron also said they are working on promoting growth: “We started the summit by launching negotiations on an EU-US trade deal that could have a greater impact than all the other bilateral trade deals that are on the table.”

Cameron, who has sought to clamp down on secret flows of money, making it a centrepiece of his presidency of the G8 this year, said: “This G8 also launched a bold, new pro-business agenda to get to grips with the problems of tax evasion, aggressive tax avoidance and corporate secrecy. Let’s be clear, if you want a low tax economy, which I believe is fundamental to growth, you have to collect the taxes that are owed: that is only fair for companies and people who play by the rules, and it is vital for the developing economies too.”

The G8 called on the Organisation for Economic Co-operation and Development, which advises rich nations on economic policies, to develop a template under which multinational corporations could be required to report profits and tax payments on a country-by-country basis, to tax authorities.

Tax campaigners had called for published country-by-country reporting to help shame companies into paying their fair share of taxes.

The G8 also said government should change rules that let companies shift their profits across borders to avoid taxes.

Countries including Ireland and Luxembourg have been criticised in the past year for allowing big international companies to shift profits from larger neighbouring markets into tax havens.

The G8 leaders’ post-summit statement was also upbeat on the global economy saying the worst of the crisis has passed and while the economic outlook is subdued, risks have abated.

Talks on the trade deal between the US and the European Union will start in July, but agreement is likely years away.