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Strengthening Tax Systems

Well-functioning domestic and international tax systems are essential to domestic economies, global trade and maintaining community and business trust in governments.

Where the tax burden isn’t spread fairly or there are loopholes in tax laws that allow some companies to escape paying their share of tax, taxpayers and businesses either have to pay more tax or accept a reduced level of government services.

In recent years international tax laws have failed to keep pace with changes in the global business environment, particularly with the rapid growth of the global economy, meaning that multinational corporations aren’t necessarily taxed the way they should be.

The G20 is strongly committed to international cooperation to protect the integrity of national tax systems. International tax cooperation will continue to focus on three related areas.

  1. Address tax avoidance, particularly, base erosion and profit shifting (BEPS) to ensure profits are taxed in the location where the economic activity takes place.
  2. Promote international tax transparency and the global sharing of information so that taxpayers with offshore investments comply with their domestic tax obligations. 
  3. Ensure that developing countries benefit from the G20’s tax agenda, particularly in relation to information sharing.

In February, G20 Finance Ministers and Central Bank Governors endorsed a new standard on automatic exchange of tax information between tax authorities in order to increase transparency in tax systems and act as a deterrent to tax evasion by private citizens.

Australia hosted the G20 International Tax Symposium on 9-10 May in Tokyo, Japan. The aim of the Tax Symposium is to discuss developments in international taxation focusing on the key items of the G20 tax agenda, such as the future of the international taxation landscape, work carried out by the OECD in relation to the BEPS Project and the automatic exchange of tax information. For the event outcomes read the report and for event details visit the Tax Symposium event page.

In September, G20 Finance Ministers and Central Bank Governors committed to the completion of the measures under the two-year G20-OECD Base Erosion and Profit Shifting (BEPS) Action Plan by 2015. Ministers and Governors also agreed to begin exchanging information automatically between G20 countries and with other countries by 2017 or the end of 2018.

Download the Policy Note Strengthening tax systems.

Engagement Groups