[LIMA] Finance ministers from the world's leading economies gave the green light Friday to a new plan to crack down on tax evasion by multi-national corporations, which costs countries at least US$100 billion a year.
The so-called Base Erosion and Profit Shifting (BEPS) plan, which seeks to close the loopholes multi-nationals use to avoid taxes, was adopted by finance ministers from the G20 group of leading industrialized and emerging economies at a meeting in Lima, Peru, they announced.
G20 leaders must now give final approval at a summit in November in Turkey.
Turkish Deputy Prime Minister Cevdet Yilmaz, who announced the decision, called it a "historic moment" for the fight against tax evasion that costs governments an estimated US$100 billion to US$240 billion a year.
He said the plan addressed a "very comprehensive set of issues," including profit-shifting across borders, corporations' use of no-tax status in multiple countries and the digital economy.
"These are very complicated issues that required an extensive technical effort and a hard-to-build consensus in some cases," Mr Yilmaz said.
The 15-point plan aims to tackle low tax bills for the likes of Google and McDonald's, which have managed to sharply reduce their taxes while remaining within the law, provoking public outrage in recent years.
"Base erosion and profit shifting is sapping our economies of the resources needed to jump-start growth, tackle the effects of the global economic crisis and create better opportunities for all," said Angel Gurria, secretary general of the Organisation for Economic Cooperation and Development, which drafted the long-awaited plan.