iNVEZZ.com Friday July 19th: Currently under way, the two-day meeting of finance ministers and central bank governors of the Group of Twenty (G20) countries, being held at the august Manege in Moscow, is expected to focus on global employment, Japan’s endeavours to reverse deflation and the potential for cross-border trade wars.
First up though has been cross-border corporate tax dodging. The British Chancellor of the Exchequer, George Osborne, has hailed a two-year action plan today drawn up by the OECD to clamp down on questionable international corporate tax practices.
In its keenly-awaited report, prepared for the meeting, the OECD says that “a bold move by policy makers” is needed to prevent a worsening of a situation in which sovereign governments are denied billions of dollars in taxes.
The report itemises 15 separate actions the international community needs to take in order to modernise a tax system established nearly a century ago, in the 1920s, which is now outmoded and ill-equipped to deal with multinational firms that have found innumerable ways of avoiding tax, typically involving a shift in profits to low-tax countries.
Germany, Britain, France and Russia want the proposed action plan to be adopted by the entire G20 and then implemented over the next two years.
Finance ministers and central bank chiefs are now working towards agreed action for inclusion in the final communique tomorrow.
Other topics due to be discussed during the two-day meeting are the health of the global economy and ways of preventing a renewed slowdown as growth cools in emerging markets.
During the day’s talks so far at the G20 meeting, the US dollar has remained stable against the other majors. Pairs are currently trading as follows:
