MEXICO CITY (Reuters) - Britain and Germany are leading a push in the Group of 20 economic powers to make multinational companies pay their “fair share” of taxes following reports of large firms exploiting loopholes to avoid taxes.
British Finance Minister George Osborne said at a G20 meeting in Mexico City on Monday that discussions showed there was “widespread support” for the joint initiative.
“We want to make sure that we are successful economies which are the home of international businesses but that international business pay the taxes that we expect them to pay,” Osborne told a joint news conference with German Finance Minister Wolfgang Schaeuble.
The two nations said international tax standards have struggled to keep up with changes in global business practices and that some companies have been able to shift taxation of profits away from where they are generated.
In October, a Reuters report showed Starbucks (SBUX.O) had legally lowered its UK tax bill with inter-company loans, paying royalty fees to foreign subsidiaries and allocating money made in the UK to other units in so-called “transfer pricing”.
British Prime Minister David Cameron said last month he was unhappy with the level of tax avoidance by big companies.
A German finance ministry spokesman said France was backing the drive, which Germany and Britain plan to push forward during Russia’s presidency of the G20 next year.
Schaeuble told reporters in Mexico City he was hopeful the initiative would get a “lot of support”.
Reporting by Dave Graham and Gernot Heller; Editing by Kieran Murray