Eversheds comment: Revolutionary tax proposal will test international political will

• United Kingdom

12-02-2013

Commenting on the OECD's proposal to overhaul international corporate taxation rules, Ben Jones, tax expert at global law firm Eversheds, says:
 

"Probably the biggest issue facing governments is the current fragmented and inconsistent approach to agreeing international rules and laws, which has to date largely depended upon any two countries agreeing the tax treatment of their citizens' and businesses' activities in their respective territories. Such agreements are intended to be based upon an international standard (developed by the OECD), but in practice can vary largely, often depending upon the bargaining power of the countries involved. Such agreements also typically take many years to agree or amend and, when finalised, often represent a compromise with neither country achieving all its objectives.

"Against this backdrop, the OECD's suggestion of a multi-lateral convention that harmonises the rules on international taxation is revolutionary and potentially presents the best opportunity to effect real change to the taxation of multinational businesses. However, the proposal will truly test the political will to effect change (as well as potentially revealing the position of multinational businesses on this issue). History has demonstrated that agreements between nations with competing interests and internal pressures can take a long time and in many cases ultimately fail, with issues of taxation and tax sovereignty often proving to be among the more sensitive matters for nations to agree on."

• Ben Jones
• Partner
• +44 207 919 4686
• +44 207 919 4686
• Connect with Ben Jones on LinkedIn

< Go back