Global solutions

The current international tax rules are not the result of an open and inclusive global negotiation. In fact, more than 100 developing countries were excluded from the negotiations when the current standards were agreed. The OECD – also known as the rich countries club – continues to occupy the role as global decision maker in tax matters, often in tandem with the G20. Still today, there is no truly global intergovernmental process, which can deliver strong and truly reformative solutions to combat international tax dodging.

This issue has for years been a high priority for the Group of 77 (G77) – a coalition representing more than 130 developing countries.

The G77 has repeatedly called for decision-making on global tax standards to be moved to the United Nations (UN), where all countries have a seat at the table, rather than the G20 and the OECD.

In 2017, the G77 the highlighted that: ‘There is still no single global inclusive forum for international tax cooperation at the intergovernmental level (…) the Group underscores that the United Nations is the only universal forum where these issues can be discussed in an open, transparent, and inclusive manner’.

Like the G77, both civil society organisations and the European Parliament has repeatedly called for an intergovernmental UN tax body. However, the European Commission and several member states have opposed the idea.

Instead of a truly global negotiating forum, developing countries are encouraged to join the OECD’s Inclusive Framework. Membership of the forum requires developing countries to pay a membership fee of €20,000 per year to the OECD, and commit to implementing the standard on Base Erosion and Profit Shifting (BEPS). Similar to previous international decisions on taxation, this BEPS package, which runs to nearly 2,000 pages, was negotiated through a process where over 100 developing countries were excluded from participating. Meanwhile, its content has been criticised as both inadequate and, in some cases, highly problematic.

The report Tax Games – the Race to the Bottom maps and rates the positions of 18 European countries, as well as the European Commission and Parliament, on the issue of the establishment of an intergovernmental UN tax body.

Click here to see a summary of the ratings.

The criteria for the rating can be found here.

To read the full report (including sources and references) click here.