LEADERS OF THE G8 NATIONS have announced a crackdown on money laundering, tax evasion and aggressive tax avoidance at the end of a two day summit in Northern Island.
Proposed by UK Prime Minister David Cameron at the gathering in Lough Erne today, the curb on tax avoiders will require "shell companies", which are often used to exploit tax loopholes, to be more transparent regarding the "beneficial ownership" of businesses.
It was agreed that among the information to be shared will be who benefits from the operations of shell companies, special purpose companies and trust arrangements often employed by tax evaders.
Urging countries to "fight the scourge of tax evasion", the summit communique asked countries to "change rules that let companies shift their profits across borders to avoid taxes" as well as suggesting that "multinationals should report to tax authorities what tax they pay where".
The UK, US, France, Germany, Italy, Canada, Japan and Russia sent a message on Twitter earlier today to say that agreement had been reached on a UK action plan to prevent misuse of companies and legal arrangements.
The international agreement on the new rules follows the revelations of how large information technology firms such as Amazon, Google and Apple have minimised their tax bills in the past. and it is hoped that the pact will make it more difficult for such companies to set up and use offshore tax havens.
In November last year, complaints arose over Amazon paying only £2.4m tax in the UK. This was despite making sales of £4.3bn and receiving £2.5m in government grants, so effectively Amazon cost the country £100,000 in 2012.
During May Google was back in the tax-dodging spotlight. Margaret Hodge, chair of the Public Accounts Committee (PAC) said that the web giant was devious, calculated and unethical for misleading parliament over its tax affairs six months ago, adding that Google certainly does "do evil" when it comes to paying taxes.
Apple also threw its hat into the ring on tax affairs across the pond, with the firm's CEO Tim Cook revealing that he would visit Washington to testify about stashing more than $100bn overseas.
And the tax revelations haven't slowed down. More recently, a Parliament report from the Public Accounts Committee Google revealed that Google should not be spared an investigation into the way it pulls the UK tax system's tail. µ