Proposals for clamping down on tax inversions
First published in The American Lawyer, 22 September 2014
The international Organisation for Economic Co-operation and Development on 16 September proposed measures to crack down on legal corporate tax dodging by making global companies pay, regardless of where they move their profits. Pro-business critics were quick to attack the plan.
Green, founder and chief executive of deVere Group in London, said, "It must be remembered that corporations don't pay the tax, people do. When corporation tax is increased, this burden is, typically, carried by investors through lower returns, workers through reduced wages and/or consumers through higher prices."
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Time will tell whether all of the OECD's initiatives will be implemented and indeed how they will be enforced, but there is still cause for concern. At the heart of the BEPS proposals is a reorganisation of the way in which profits are taxed, particularly in light of the new and 'borderless' digital economy. The global initiative would require close international cooperation, transparency, data and reporting requirements from all countries and multinationals