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OECD wants nonmembers to join fight against multinational tax cheats

JIJI

The Organization for Economic Cooperation and Development plans to call on nonmember economies to cooperate to ensure multinational corporations pay their fair share in taxes, a Japanese source said.

The OECD, which has 34 member countries, believes cooperation with nonmember economies is crucial for closing tax system loopholes around the world, the source said.

The organization aims to clarify cooperation among countries in an upcoming action plan on tax avoidance, he said.

The plan, expected to be drawn up later this month, will reflect discussions at the Group of Eight summit in Northern Ireland earlier this week.

Tax avoidance by transnationals, including Apple Inc. and Starbucks Corp., are believed to be causing huge losses in corporate tax revenues in many economies.

It remains uncertain whether OECD members and nonmembers will be able to unite to combat tax avoidance, as disagreement is already being seen among advanced economies.

The OECD is also reviewing the scope of systems that allow base erosion and profit-shifting for tax avoidance, planning to deem tax preferences for foreign companies as harmful.

The OECD is expected not to question the existence of low tax rates in economies used as tax havens, as setting tax rates falls under national sovereignty.

¥20 billion in evaded tax

Tax evasion in Japan in fiscal 2012 amounted to ¥20.47 billion in 191 cases, up by some ¥1.2 billion from the previous year, according to the National Tax Agency.

The number of cases was up by two. Tax authorities filed criminal complaints with prosecutors for 129 cases, or 67.5 percent of the total.

In fiscal 2012, tax authorities launched raids in 190 of the total cases, compared with 195 in fiscal 2011 and the second-lowest since fiscal 1970.

“The number of large-scale tax evasion cases was low as economic conditions have been severe,” a tax official said Thursday.

Of the 129 cases for which criminal complaints were filed, 11 involved information service companies, including dating website operators. The number also stood at 11 for nightclubs and bars.

The number of inheritance tax evasion cases came to 10, the second-highest since 1955. The number of cases in which taxable assets were hidden overseas also came to 10.