The ambitious OECD plan will propose at least two years of detailed work on about a dozen of the most contentious issues, including the rules on transfer pricing.
The presentation follows public and political pressure – particularly in the UK – regarding the artificial flow of money for tax purposes which has thrown the spotlight on multinational corporations such as Google and Starbucks.
As the presentation is aimed at corporates, George Bull, a senior tax partner at Baker Tilly said that any change in tax legislation is not likely to effect individuals in any significant way, and it would be a long time before new rules were likely to come into force.
“It may effect expatriate directors of multinational organisations who may no longer need to reside in particular jurisdictions for tax purposes, but beyond that, repercussions are unlikely because the presentation is squarely aimed at corporates," he said. However, he added that, because of the weight that the Paris-based OEDC commends, people would be watching careful to see what the recommendations are.
“We think that the presentation will try in some way to link the revenues of multinational businesses to particular territories and give tax rights where revenues seem to arise. This is a really difficult thing to achieve because of the way the international tax system works,” he said.
According to Bull, any change is likely to take a long time: “A wholesale global change like this would have to be subject to consultation and the way that this is likely to be implemented is through changes in treaties between countries which will govern who has the right to arrange tax in different circumstances."
He added: “In some countries this may require a domestic law change so you could be looking at much longer than a period of three years.”
Ahead of the OECD presentation, the business trade organisation the Confederation of British Industry is planning to publish its own thoughts on the international business tax debate and, in a report out later this week,is expected to urge the UK Treasury to stand up for British industry and ensure that any proposals do not harm the UK’s tax competitiveness.
The OECD gave a presentation to the leaders of the G8 at a summit last month in Northern Ireland.
