OECD takes parliamentarians seriously in the fight against tax evasion

7 February 2014

OECD takes parliamentarians seriously in the fight against tax evasion

In the next two years the Organisation for Economic Cooperation and Development (OECD), the body that brings wealthy countries together, has to produce a range of measures to combat tax evasion. Most of the negotiations around these measures take place behind closed doors. On the initiative of SP Euro-MP Dennis de Jong, however, there has now been an interparliamentary network established that will be advising the OECD on this issue. ‘The first meeting, which took place yesterday in Paris, was a big success,’ says De Jong. ‘Some fifty MPs from across the OECD countries were present and it turned out that every one of them was aware of the need to close all the loopholes in the law so that big international corporations at last have to pay tax. As things stand only ordinary people in small and medium-sized businesses pay their full whack. This has to change and quickly.’

In the media over the last few weeks a number of reports have surfaced to the effect that the OECD member states are failing to agree on the issue of taxing international corporations in the digital economy. ‘This was denied by the OECD Secretariat in response to my question. The conflict between especially France and the US concerns taxing corporations on the basis of their activities, for example the collection of data by Google. France’s view is that, if activities take place in your country, you should also be able to impose taxes. The OECD’s position, however, is that you tax profits, not activities. So here the OECD is in fact taking the Americans’ side. I find it important that we in our capacity as Members of Parliament conduct this discussion with the OECD because you can make any fine agreements you like on taxing profits, if digital activities don’t count, the place where the tax is actually imposed remains arbitrary. The SP’s line is that you pay taxes where the activity from which your profits are derived takes place.’

During the meeting it was agreed that the network would exchange a great deal of information and that interested Members of Parliament would contribute to consultations on various aspects of the subject. ‘In particular in February and March a number of discussion papers will be published’ says De Jong. ‘Together with like-minded MPs from other countries I want to ensure that our voices are heard in a timely manner. The OECD is aware that governments often aren’t inclined to deal effectively with tax evasion. The Dutch government is no exception. So it’s precisely Members of Parliament who feel the pressure from society to fight tax evasion with hard agreements. Now we’ll be filling this role not only nationally, but internationally.’

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