Tax Avoidance: Base Erosion and Profit Shifting

Lord Harries of Pentregarth Excerpts

Monday 2nd November 2020 Lords Chamber

Asked by

[Lord Harries of Pentregarth]

To ask Her Majesty’s Government what steps they are taking in their discussions relating to the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting 2.0 Project to prioritise a fairer settlement for those less economically developed countries who lose income as a result of tax avoidance by multinational corporations.

[Baroness Penn (Con)]

My Lords, the UK remains committed to the OECD’s base erosion and profit shifting 2.0 project. We robustly support the discussions being taken forward in the OECD’s inclusive framework group. That includes more than 100 jurisdictions and ensures that less economically developed countries have an equal say in developing international solutions. The UK continues to champion international initiatives that build capacity in developing countries.

[Lord Harries of Pentregarth (CB) [V]]

I thank the Minister for her answer. As she will know, low-income countries lose more of their income than do middle-income ones—some 9% as opposed to 3%—as a result of profit shifting by multinational companies. In the light of this, will Her Majesty’s Government prioritise the needs of low-income countries with a view to finding a process that will help them better than those presently on offer? I note that the Tax Justice Network is equipped and ready to take on this task if commissioned to do so.

[Baroness Penn (Con)]

The UK is committed to BEPS 2.0 being an inclusive process. Capacity building and technical assistance remain key priorities for the UK as they empower developing countries to draw on more of their own resources as key enablers of the sustainable development goals. This includes a £47 million package from the UK to support developing countries’ tax and public finance systems, including the OECD’s work on international tax standards to tackle evasion and avoidance.