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The chancellor, George Osborne, and German finance minister Wolfgang Schäuble have called for international cooperation to strengthen standards for corporate tax regimes.
The statesmen recognised that “global companies are a significant source of growth, investment, employment and tax in Germany, Britain and the EU as a whole”.
They added in a prepared statement: “International tax standards have had difficulty keeping up with changes in global business practices, such as the development of e-commerce in commercial activities.
“As a result, some multinational businesses are able to shift the taxation of their profits away from the jurisdictions where they are being generated, thus minimising their tax payments compared to smaller, less international companies.”
Osborne and Schäuble backed the Organisation for Economic Cooperation and Development’s (OECD) work on identifying possible gaps in the standards as a first step in dealing with profit shifting and the erosion of the corporate tax base at the global level.
The OECD’s first report is expected to be published at the next G20 meeting in February.
