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OECD To Recommend G20 Anti-Evasion Action

10 July 2013   (0 Comments)
Posted by: Author: Ulrika Lomas
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Author: Ulrika Lomas

The Organization for Economic Cooperation and Development (OECD) will urge the G20 group of nations to agree on amendments to international tax rules within the next two years, according to reports.

Reuters news agency claims to have seen a draft copy of an OECD document which sets out recommendations for the prevention of profit shifting by multinationals into offshore low-tax jurisdictions. The G20 had requested that the OECD develop an action plan on international tax evasion and avoidance, which it is expected the OECD will formally unveil at a G20 meeting later this month.

According to Reuters, the draft argues that "domestic and international tax rules should be modified in order to more closely align the allocation of income with the economic activity that generates income." It allegedly also calls on Governments to clamp down on businesses that fail to establish a taxable residence in jurisdictions where they carry out major activity, and to prevent the abuse of double taxation treaties.

The OECD's apparent initiative follows the signature of a ten-point anti-evasion plan by the G8 last month. The Lough Erne Declaration urges that tax authorities "should automatically share information to fight the scourge of tax evasion," and stresses that multinational corporations should report what tax they pay, and where. In addition, it commits signatories to amend rules that enable profit shifting for the purposes of tax avoidance, and urges companies to obtain information on their beneficial ownership and forward this to the relevant authorities.

Similarly, the European Commission has issued plans for a substantial extension of the European Union's (EU) automatic information exchange capabilities. The scheduled implementation of the Directive on Administrative Cooperation will mean that, from 2015, EU member states will exchange information automatically on five categories of income and capital. These are: employment, directors' fees, life insurance products not covered by other European Commission Directives, pensions, and the ownership of, and income from, immovable property. If the Commission's new proposals are implemented, dividends, capital gains, all other forms of financial income, and account balances will also be included in the list.

The OECD has yet to comment on the apparent leak.


Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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