The International Monetary Fund, World Bank, United Nations and the Organisation for Economic Co-operation and Development (OECD), announced a joint platform for collaboration on tax issues, a beginning step to design and implement international standards.
The announcement came on the heels of the “Panama Papers”, a trove of documents leaked from a Panama law office that showed top international politicians among the owners of thousands of anonymous shell companies located in tax havens.
“This effort comes at a time of great momentum around international tax issues,” the four organizations said in a statement.
“Strengthening tax systems –- policy and administration –- has emerged as a key development priority.”
The first task for the initiative will be to deliver “toolkits” to developing countries to help them act against corporations using accounting tactics like profit shifting and transfer pricing between countries to lower their tax bills.
According to the United Nations, billions of dollars are denied to developing country government coffers each year due to what is often called euphemistically “aggressive tax planning” by multinational companies.
Recent cases in Europe demonstrate how major companies shift income and assets to their offices in countries with the lowest tax rates.
Developing countries “are the ones who lose out to the creativity and inventiveness of the multinationals,” IMF Managing Director Christine Lagarde said in a discussion of the issue on Sunday.
In 2013 the OECD, which groups the world’s leading economies, launched a program to beginning reining in tax avoidance and to force companies to be more transparent about their finances in each country in which they operate.