13 Feb 2013 09:00
Kevin Nicholson, head of tax at PwC, said:
"The OECD is the right body to be reviewing the taxation of multinationals. No single government can change the international tax system on its own. The OECD has played a key role in developing the international norms in taxation over the years and is best placed to adapt them to today's global marketplace. In the meantime, most tax authorities have the powers to investigate and challenge if they believe current transfer prices are not right or that there is insufficient substance in overseas locations.
The 91 pages of analysis is a helpful summary of areas of public concern including transfer pricing, mismatches in tax regimes in different countries, and potential weaknesses in the operation of common international tax principles. Given current criticism of corporate tax practices, we welcome the debate on the principles by which taxing rights are divided between countries. Having clear rules for allocating profits is essential for all international businesses.
But while the paper focuses on corporate tax strategies and behaviour, it also seems necessary to take into account the actions of countries competing for tax revenues. We look forward to developments in this area, including the next stage of the OECD's work."
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