G8 to shy away from naming and shaming corporate tax avoiders - draft
LONDON, June 14 (Reuters) - The G8 group of leading economies will shy away from adopting a measure aimed at curbing tax avoidance by highlighting when companies channel profits into tax havens, and will include a watered down alternative, according to a draft statement.
British Prime Minister David Cameron, who is hosting the annual G8 Summit in Northern Ireland next week, has said he will put tax evasion and aggressive avoidance at the heart of the meeting.
Tackling corporate tax avoidance has become a political goal internationally following public anger about revelations over the past year that companies like Apple and Google had used structures U.S. and European politicians said were contrived to minimise the amount of taxes paid.
But a draft of the communique to be released by the leaders at the end of the summit, circulated by Britain and seen by Reuters, will not support a rule that would force companies to publish their profits, revenues and tax payments on a country-by-country basis.
The draft is dated May 21 and will have been subject to change but without a dramatic shift, the thrust seems clear.
The European Commission and tax campaigners back such a measure in the hope that companies would be shamed into abandoning corporate structures under which most of their profits are reported in tax havens, where they have few staff or sales.
The British plan envisages that companies would, potentially on a voluntary basis, report financial information on every country where they operate, to the tax administration in each of the countries.
"We call on the OECD to develop a common template for country by country reporting to tax authorities ... including an examination of both voluntary and compulsory approaches," the draft said.
Most countries already have access to such information but it could help some developing countries who have expressed difficulties in accessing information about companies outside their territory which they suspect to be involved in siphoning profits from affiliated companies on their territory.
However, even here the information would be of limited benefit since it would not be sufficient to legally prove abusive behaviour.
Business groups have lobbied heavily against public country by country reporting saying it would be unreasonably burdensome but Sven Giegold, member of the European Parliament for Germany's Green Party criticized the failure to adopt the measure.
"This is not the expected breakthrough we had hoped for and may not be solid a step forward," he said. "The G8 declaration offers nothing new on tax."
Britain's finance ministry declined to comment on the draft.
The UK government has so far declined to support the EU proposal on publishing country-by-country profits and only said it supports voluntary disclosure by companies.
The draft communique also included a commitment to create central registries that would contain details of the beneficial owners of companies, a move aimed at stopping individuals stashing possibly stolen money in tax havens out of the gaze of tax authorities.
The communique says these registers would be accessible to tax authorities and law enforcement agencies but tax campaigners had called on the registers to be made public.
Giegold also criticised the draft's failure to include automatic exchange of information on beneficial ownership to tax authorities.
Automatic exchange of information is seen as more helpful in highlighting wrongdoing since offering information on a requested basis requires a tax authority to already have a suspicion of wrongdoing.
(Editing by Mike Peacock)