Tax evasion to global growth: What G20 summit will discuss in Brisbane

As it attempts to unearth black money stashed abroad, India today said the Grouping of 20 major economies (G20) of which it is a member is committed to a global response to deal with cross border tax avoidance and evasion.

Tax evasion will be a key issue at G20’s upcoming summit in Brisbane which is expected to deliberate on a timeline for implementing the common reporting standards for automatic exchange of tax information by 2017. Prime Minister Narendra Modi will be among other world leaders to attend the two-day summit starting on November 15.

Former Union Minister Suresh Prabhu, who will be Modi’s ‘sherpa’ at the summit, said there will be a particular focus on steps to deal with Base Erosion and Profit Sharing (BEPS), where globally operating firms shift profits to low or no-tax jurisdictions.

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“There will be a new platform, a new regime and common reporting standrds,” Prabhu said, giving a broad overview on the G20 priorities at the summit.

An action plan to tackle BEPS to make sure companies pay their fair share of tax is expected to be finalised in 2015.

The BEPS initiative would ensure that tax is paid where profits are made.

India last month failed to attend an OECD meeting in Berlin where a multilateral agreement requiring a commitment to follow international standards of confidentiality for information received relating to black money was signed.

Official sources said that India was not able to attend the Berlin meeting where it was to sign a multilateral competent authority agreement and intended first information exchange date.

The Government of India had to give an international commitment that it would follow international standards on information received.

At the meeting of the Organization of Economic Cooperation and Development (OECD), 51 countries signed the agreement to share financial data and boost efforts to crack down on tax evasion.

The transparency drive, which will launch the automatic exchange of tax information between countries, was hailed by finance ministers as a watershed in the battle against tax dodgers.

Prabhu also said that taxation issues relating to ecommerce required consideration of the G20 countries.

“There is some progress but lot needs to be done,” he added.

According to a report in The Economic Times,the minister also said that the G20 summit will discuss ways to boostthe global growth. India’s contribution to this will be substantial, he was quoted as saying in the report.

Apart from growth, the G20 nations will also take up issues of ebola, climate change and energy security, he said.

With inputs from PTI