This is a joint post with Owen Barder.
In January, David Cameron nailed his colours to the mast with a speech in Davos that set out the three Ts agenda for the UK’s chairing of the June G8 meeting: taxes, trade and transparency. Since then, there has been much discussion of how serious the agenda is and what the G8 can actually deliver.
News broke on April 9th of agreement between the UK, France, Germany, Italy and Spain to pilot “multilateral automatic tax information exchange.” In France, President Hollande went further – announcing a draft law aimed at ‘moralising’ French public life, as former budget minister Jerome Cahuzac was expelled from the governing party for repeatedly denying the existence of his Swiss bank account.
Last week saw a series of news stories break around the world, in what may have been the largest ever cross-border journalistic collaboration. The stories, coordinated by the International Consortium of Investigative Journalists (ICIJ), are based on a major leak of files from company formation agents operating primarily in the British Virgin Islands and the Cook Islands.
This post was originally published in The Broker.
An obscure reference to reforming the taxation of multinationals in the UK budget speech might be more important for developing countries than the big increase in aid that was announced at the same time. Mandatory ‘combined reporting’ by multinationals could enable countries to tax multinationals properly.