OECD to close tax loopholes

International efforts to curb corporate tax avoidance got a boost Tuesday as the OECD proposed changes to global tax laws that would block companies from shifting profits into tax havens.

The draft proposals have been agreed upon by all members of the OECD and G20, so most industrialized countries are on board, but they have yet to be ratified into law.

The OECD said the measures would mostly affect leading technology companies such as Amazon and Google, which have been scrutinized for taking advantage of tax treaties that allow them to protect some profits from being taxed at all.

Both companies maintain that they abide by tax law and pay all the taxes they owe.

Corporate tax avoidance has received increased attention since the financial crisis and governments across the world have sought to close legal tax loopholes for businesses.

Traditionally, the OECD's work on international tax regulations has focused on ensuring that companies are not taxed twice. Now it's focus has shifted.

"We are putting an end to double non-taxation," said the OECD's head of tax, Pascal Saint-Amans.

There is, however, criticism from some quarters. Anti-poverty charity ActionAid, for instance, criticized the plans saying some of the measures agreed upon would be too costly for developing countries to implement.

cjc/sri (Reuters, AFP)