G7 nations concord to target tax evasion and avoidance

After the two day meeting at Aylesbury in Buckinghamshire, UK, the Group of Seven industrialised nations agreed that collective action was needed to target tax evasion and avoidance, including by multinational companies using transfer pricing rules to shift profits into tax havens. UK currently holds the presidency of G7, besides it comprises of the US, Germany, Japan, Italy, France and Canada. 

In a news conference held jointly with Bank of England governor Sir Mervyn King, and Chancellor Osborne said that the countries had also agreed it was important to ensure that no bank was "too big to fail". He also added, "we must put regimes in place to deal with failing banks and to protect taxpayers and to do so in a globally-consistent manner". The chancellor reaffirmed that there are still many challenges to securing sustainable global recovery and can't be taken for granted.

Britain, Germany and other big countries had raised the issue of tax avoidance earlier this year and have asked the Organisation for Economic Co-operation and Development ( OECD) - which advises rich nations on tax policy - to examine possible changes to address the problem of multinational companies using transfer pricing rules to shift profits into tax havens.

Britain wants all EU countries to sign up to a pilot scheme where tax authorities share information with each other, including low tax countries such as Luxembourg and Austria. Germany, France, Spain, Italy, the UK and US are currently signed up to the scheme. Luxembourg has said it will join too, but Austria has yet to confirm if it will take part. 

Ahead of the meeting expectations prevailed that Japan would be criticised for a massive stimulus plan that had pushed down the value of its currency yen. But Japan was not reprimand during the talks, despite some countries being concerned that Tokyo is engineering an export-led recovery that could hinder other regions' ability to grow.