Profit shifting a regional issue: Palaso
Credit: The National
Profit shifting by large companies is a regional issue that can be addressed through improved information sharing between tax authorities of economies, says Internal Revenue Commission commissioner-general Betty Palaso.
She said this at the opening of the Advancing Base Erosion and Profit Sharing (BEPS) and Automatic Exchange of Information (AEOI) Priorities in Apec technical workshop this week.
Palaso said PNG was seeking political endorsement to adopt and implement the common reporting standard (CRS).
This is a new guideline of automatic exchange of information, to address bank secrecy and promote tax transparency in the country being taken on by nations.
“Some will be more advanced in their journey in this issue of implementing the BEPS package, but for some others like us are at the early stages,” Palaso said.
“No matter where you are, one thing is clear: It is important that we all work together in unity as taxation administrators and policy-makers. We collaborate together to combat base erosion and profit shifting and improve transparency.
“Profit-shifting by multinationals is nothing new.
“With greater globalisation and cross-border activities, economies have become more integrated and corporations have naturally followed suit. Multi-national enterprises now represent a significant proportion of global gross domestic product. It is no secret that there are many that seek to exploit legal gaps and mismatches in tax rules, which pushes the boundaries of acceptable tax planning.”
Palaso said tax payers that shifted money off shore with the intention of hiding it from revenue authorities would be a thing of the past with CRS – a new guideline of automatic exchange of information.