The finance ministers meeting today at the G20 held in Moscow have today pledged to ensure that multinational companies will no longer be able shifting profits from a home country to pay less tax elsewhere – the aim is to prevent tax avoidance by large companies.
France, Britain and Germany have been the main proponents seeking radical changes to existing european legal loopholes and members of these countries also promised to refrain devaluing their currencies to gain economic advantage; which could cause a “currency war”.
The fears had been sparked by Japan’s recent policies, which have driven down the value of the yen, aiding its exporters.
Organisation of Economic Co-operation and Development (OECD) found that multinational firms could exploit gaps between tax rules in the different countries in which they operate.
The finance ministers of the UK, France and Germany – George Osborne, Pierre Moscovici and Wolfgang Schaeuble have called for international action to crack down on companies transferring profits from their originating country to another in order to lower the tax paid.
Mr Osborne decried a global taxation system he said had been guided by principles set out by the League of Nations in the 1920s, with few changes since.
How does Price Fixing work?
An imaginary company CiceroUK Ltd is a subsidiary of the imaginary US company CiceroCorp. It provides books from the paper that’s manufactured at Paper Corp factories in China, and then sells them in the UK.
CiceroUK Ltd’s profit statement
|Total sales revenues||£100m|
|– Cost of Paper from China||£50m|
|– Labour costs and UK overheads||£25m|
|– Royalty fee paid to Paper Corp *||£15m|
|– Interest on loan from CiceroCorp||£5m|
|Taxable profit (revenues minus costs)||£5m|
“Transfer pricing” rules apply to the cost of parts, the fee payment and the interest on the loan. If Paper Corp overcharged for any of these, it would reduce CiceroUK corporation tax bill in the UK, while increasing CiceroCorp axable profits in another country.
*For usage of intellectual property rights and brands owned by the US company
For more information in how companies are avoiding paying Corporate Tax see http://www.bbc.co.uk/news/business-20580545
The major E3+3 countries of the world (including the UK, US, China, France, Germany and Russia) will be meeting today in Instanbul with the Iranian Government once again to discuss and have an offer of an assurance over any proposed nuclear programme that Iran may be conducting. This follows a meeting of the E3+3 at the UN General Assembly in September 2009. At that meeting Iran’s nuclear programme was found a matter of concern to the E3+3 countries as they said in their statement – those talks basically wanted to see Iran to implement all measures required by the IAEA and the UN Security Council and to build confidence that a exclusively peaceful nature nuclear programme was only being developed.
The Foreign and Commonwealth Office (FCO) website has issued the following statement : “We welcome the fact that the Iranian government is ready to re-engage with the United Kingdom and other members of the international community on its nuclear programme. These talks present a genuine opportunity to move things forward. The Iranian government has written to us to say it wants these talks to cover its nuclear programme. The talks will be a demonstration of whether or not the Iranian government is really ready to do that”
The Oxford Research Group have said on their website about the risk of a conflict appearing greater than ever due to events in Iran and the arab world since the last meeting took place.ORG say’s in a statement about the talks that a negotiations between Iran and the member states of the E3+3 have proved elusive due to ‘a lack of political will, demonization, deep distrust and misunderstanding on all sides.’ They warn that if these talks fail, there could be the prospect of a military attack on Iran – which they have previously published a series of reports since 2006. Israeli itself is also poised to take action should Iran be planning such a programme (as discussed in their Global Security Briefing ‘The Potential for Israeli Military Action against Iran’s Nuclear Facilities’)
Below is the Foreign Office Minister Alistair Burt discussing his hopes for negotiations with the Iranian Government during the E3+3 talks today.
Asked about the prospect of a movie, Saunders, 53, who plays Eddy alongside co-star Joanna Lumley, 65, said: “I’m definitely going to do it.
II’m aiming to shoot this in a beautiful part of the Riviera. I fancy the south of France in the spring.”
She will hope the film, likely to be released in 2013, will rival the success of The Inbetweeners Movie.
It was 2011’s biggest grossing British movie, taking £45million at the box office and selling more than a million DVDs, despite a budget of just £3.5million.
There will be another Ab Fab in 2012, with a storyline set around the Olympics.