Chancellor Calls For Global Tax Crackdown

George Osborne has renewed his call for international action to tackle so-called "profit shifting" by multinational companies.

The Chancellor revealed the next steps in his fight to reform global tax rules ahead of meeting other finance ministers at the G20 in Moscow.

Calls for an overhaul of tax laws, including the controversial transfer pricing rules that were written almost 100 years ago, will be highlighted at the G20 by the Organisation for Economic Co-operation and Development (OECD), which will present its report published this week.

It comes as companies such as Google, Facebook, Amazon and Starbucks have sparked controversy after it emerged that they all pay minimal tax on large UK revenues.

The Chancellor will announce that Britain will chair a new transfer pricing group which will look at how to reform the system which allows profits to be diverted to a parent companies or to lower tax jurisdictions, via royalty and service payments.

It is one of three groups set up by the OECD to look at the tax issues which will help the group prepare a "plan of action" to be put forward to the G20 in July.

Germany and the US and France also lead the other two groups, which will include looking at how to determine tax jurisdiction, particularly in the context of e-trading.

Mr Osborne said: "Britain has cut its corporation tax rate by more than any other country in the G20 over the past two years, a message to the world that we are open for business that has seen companies return to Britain, and helping to create and secure thousands of jobs and millions in investment.

"But our commitment to the most competitive corporate tax system goes hand in hand with our call for strong international standards to make sure that global companies, like anyone else, pay the taxes they owe.

"That's why the Britain, with Germany and France, asked the OECD to scrutinise the international rules, and we will together welcome their report to the G20 this weekend. The report shows this is an international issue that requires international action.

"It shows the global economy has changed massively over the last decade, but global tax rules have stood still for almost a century, and Britain will lead the international effort to bring them into the 21st century."

In an interview with Sky News, Mr Osborne went on to dismiss newspaper reports that a pre-election RBS share giveaway was under consideration.

Scandal-hit RBS - which is 81% state-owned after a £45bn bailout in 2008 - could be ready for privatisation this year, but at present prices that would mean a huge public loss.

The Liberal Democrats have championed the idea of a share giveaway and it was reported today that Conservative ministers were also now examining the idea of handing it back to taxpayers.

Party sources told the Independent and Daily Mail that Mr Osborne saw continued ownership as politically "untenable" amid Libor-fixing and other scandals and was keen to end the state's role soon.

But the Chancellor said the idea was "premature" and not something the Treasury is currently looking at.

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