Large web firms such as Google and Amazon could be forced to pay more corporation tax in the future after world leaders at the G8 Summit promised to change the rules governing tax payments to ensure large companies pay their fair share.
Corporations' tax arrangements have dogged the UK government and numerous others over the past few years as large companies like Google and Amazon have used tax loopholes to pay very low amounts in tax.
MPs have taken a dim view of this behaviour but company leaders like executive chairman Eric Schmidt have firmly placed the ball in the court of the governments, telling them they need to change the rules if they want to see more tax payments.
In response, in a declaration from the G8 Summit, leaders have promised a number of changes to payment arrangements for tax to ensure a fair system for all, as outlined in three key points:
1. Tax authorities across the world should automatically share information to fight the scourge of tax evasion.
2. Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where.
3. Companies should know who really owns them, and tax collectors and law enforcers should be able to obtain this information easily.
Carrying out such inititiatives would help boost global economies and drive growth and prosperity, the nations said in the release from the Summit, taking place this week in Ireland.
"Private enterprise drives growth, reduces poverty, and creates jobs and prosperity for people around the world. Governments have a special responsibility to make proper rules and promote good governance. Fair taxes, increased transparency and open trade are vital drivers of this," they said.
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