Britain, France and Germany back multinational tax clampdown

MOSCOW Fri Feb 15, 2013 11:00pm EST

MOSCOW Feb 16 (Reuters) - The British, French and German governments are launching a joint initiative aimed at cracking down on tax avoidance by multinational companies.

The plan, details of which will be announced by the three countries' finance ministers at a G20 meeting in Moscow on Saturday, is a response to a report published this week by the Organisation for Economic Cooperation and Development (OECD).

The OECD highlighted a growing trend for multinationals to shift profits to countries where tax rates are lowest, and urged a sweeping overhaul of international tax rules to prevent this.

"This is an international issue that requires international action," British finance minister George Osborne said in a UK Treasury statement about the three governments' plan.

Britain chairs the Group of Eight forum this year and has said tax compliance will be a major focus when the leaders of the major economies meet in Northern Ireland in June.

Britain will chair an OECD group on transfer pricing, Germany will chair one on tax-base erosion and France - together with the United States - will examine tax jurisdiction issues, especially in relation to electronic commerce.

The groups' findings will be used to shape an OECD action plan to be presented to the G20 in July.

The tax reform plan comes at a time when governments are facing public outrage over how some multinational companies handle their international tax affairs.

In Britain, the issue of multinational tax avoidance has risen to the top of the political agenda, after revelations that companies such as Starbucks, Apple, Google and Amazon were using complex inter-company transactions to cut their tax bills.

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