OECD urges fight on tax avoidance

The OECD will deliver an action plan against tax avoidance by July as the world's top countries are getting fed up with multinationals gaming the rules to pay little to no taxes during times of austerity. "We need to take actions which should be coordinated, comprehensive and quick," said Pascal Saint-Amans, head of tax policy at the Organisation for Economic Cooperation and Development, as a number of finance ministers were in Paris this week to discuss the issue. "I am very confident that we can work together and make progress. This is very challenging work, more challenging than fighting tax evasion as it involves reforming the entire international tax system," added Angel Gurria, OECD chief. The drive against aggressive tax avoidance comes as a number of recent cases of low taxes paid by multinationals such as Apple, Google, Amazon and Starbucks in countries where they have booming operations have provoked public indignation. The companies have defended the arrangements they use, pointing out they are legal. The OECD, an advisory body to 34 advanced nations, published a report in February pointing out that international tax rules are failing to address the problem. Amidst growing calls for action by governments, Saint-Amans said the OECD plans to move quickly to provide them with a blueprint. In the crosshairs is the use of so-called hybrid mismatch arrangements that exploit the differences between tax laws between countries to lower the amount to be paid. Apple came in for criticism from US lawmakers earlier this month for using a subsidiary that exploited loopholes to not declare a tax home and pay corporate tax on $30 billion in net income. It also found Apple's Irish subsidiary negotiated a corporate tax rate of less than two percent.