New tax evasion laws proposed by France have been shot down by the United States as the country objected to their presentation at the G20 summit. Senior White House staff alerted G20 members that they would not allow changes to tax regulations that targeted the country’s technology industry, US political insiders claim.
The proposals put forwards by France were targeted at Internet firms like Amazon and Google, which have reportedly avoided millions of dollars in tax obligations by using a complicated network of offshore bank accounts. The companies are some of the United States’ largest revenue earners and fastest-growing corporations.
Amazon.com and Google have both been involved in UK tax scandals in the last year due to their involvement in offshore banking networks based in jurisdictions such as Ireland and Luxembourg. Google, in particular, reportedly used its Irish base to avoid paying hundreds of millions of dollars in UK taxes from advertising income.
White House officials understood the concerns of European government and agreed that international tax rules need to be updated. However, the difference in opinion is largely due to the existing international tax treaties, which the United States prefers to revise in favour of drafting new tax arrangements.
The tax evasion plans, which have been supported by the Organisation for Economic Co-operation and Development (OECD) are the biggest overhaul to international tax rules in several decades. The plans include information on fifteen areas that may be overhauled, with the OECD estimating that completion could take over two years.
With growing concerns over government revenue, tax has been an important point in UK political discussions. Firms such as Google, Starbucks, and Amazon have been targeted by government officials and anti-tax evasion protestors for their complex international tax arrangements and alleged avoidance of UK corporate taxes.
