The Group of 20 comprises finance ministers and central bank governors from 20 major economies: 19 countries plus the European Union, which is represented by the president of the European Council and by the European Central Bank.
G20 leaders push big companies to pay more taxes
Associated Press in St Petersburg
It's time to make Google, Apple and other multinational companies pay more taxes. That was the message from President Barack Obama and the leaders of the world's leading economies as the G20 summit ended yesterday.
The head of the Organisation for Economic Co-operation and Development said the leaders signed up to an ambitious new tax plan during the summit.
The new rules, unveiled by the OECD and debated by G20 finance ministers in July, would make it harder for companies to hide profits in tax havens and force them to pay tax in the countries where they make money.
Leaders also agreed to an unprecedented deal to share information on individual taxpayers, despite earlier resistance by China. However, it may take years to get the new tax treaties and laws into place. And advocacy groups say poor countries should also be included, warning that big companies may try to pressure governments to slow down, or dilute, the new tax rules.
"You've got to get the big guys to make a contribution," OECD chief Angel Gurria said. Otherwise, he said, "What are the treasurers, the ministers of finance left with? Medium and small-scale enterprises, the middle class to tax? Well, that has a limit".
The OECD is designing the new global tax rules and has come under fire from cross-border corporations that say they are being unfairly targeted. But OECD officials say some companies are starting to recognise that their moves to register in low-tax jurisdictions such as Luxembourg or the Cayman Islands are causing public pain.
Low tax payments by major global companies - including Google, Amazon, Facebook and Starbucks - have sparked public anger in Europe recently, as governments struggle with high debts, low growth and austerity measures.
Gurria insisted that the tax plan isn't anti-business.
"We don't want to discourage the companies from creating jobs. But we obviously don't want to encourage companies to take away the profits and squirrel them away and not share them with anybody else," he said.
He said Apple borrowed billions of dollars to pay dividends instead of bringing their profits back to the United States, because they would have had to pay a third of the profits in corporate taxes.
"Tax laws ... seem to favour this exodus and therefore we really have to take a look at the general principles," and bring down the overall burden, he said.
The timetable will depend on national legislation, but OECD officials are pushing for it to be in place by 2015.
The plan includes ways to close loopholes and allow countries to tax profits held in offshore subsidiaries. The measures would target such practices as deducting the same expense more than once, in more than one country.