Significant progress was made in fighting tax avoidance by multinational corporations at an international forum on taxation that brought 44 heads of tax authorities from around the world to Beijing, officials said.
Wang Jun, commissioner of the State Administration of Taxation, said China was among the six jurisdictions that signed a multilateral agreement last week to exchange information from reports by participating countries. The signing ceremony brought the total number of signatory countries to 39.
Country-by-Country reports are meant to provide tax administrations with a clearer picture of the global operation of multinationals and assist in the risk assessment of high-level transfer pricing. Transfer pricing can occur when companies within a multinational group trade with each other. It becomes a problem when the prices are manipulated to minimize tax bills.
It was the first time China had hosted the Forum on Tax Administration of the Organization for Economic Cooperation and Development. Representatives of corporations and international organizations also attended.
The organization said revenue losses to national treasuries from cross-border tax avoidance have grown to as much as $240 billion a year, or 10 percent of global corporate income tax receipts, an estimate it considers to be conservative.
One of the highlighted achievements of the forum was a discussion about consistent implementation of Base Erosion and Profit Shifting measures in each country, according to a communique. The BEPS project is a 15-point plan proposed by OECD to tackle multinationals’ tax avoidance.
Wang, the tax commissioner, said China has also signed agreements with Canada and the United States on tax-related cooperation.
He said the forum will advance global implementation of BEPS initiatives and strengthen global tax governance.