China will become the latest signer of the Organisation for Economic Co-operation and Development (OECD) and European Council’s Convention on Mutual Administrative Assistance in Tax Matters, the OECD announced. The signing is expected to take place on Tuesday in Paris.
The signing will mark another step in the OECD’s efforts to create an international framework for preventing multinational corporations from transferring profits to low-tax jurisdictions (which the OECD labels “base erosion and profit shifting”).
The convention currently has 53 signers, including all of the members of the so-called G20 economies. The convention aims to fight international tax avoidance and tax evasion by ensuring co-operation among countries in assessing and collecting taxes.
In July, the OECD announced a base erosion and profit shifting action plan to address the challenges countries face in maintaining tax revenue in a global digital economy. It includes 15 specific actions to prevent international tax avoidance by multinationals.
—Alistair Nevius (email@example.com) is editor-in-chief, tax for CGMA Magazine.