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Jan Vleggeert: action programme OECD step in the right direction

The Organisation for Economic Cooperation and Development (OECD) has a new plan for tackling tax avoidance.

Jan Vleggeert

The plan builds on the action programme which the  G20 adopted in 2015. According to the OECD, that programme has achieved too little because multinationals are still finding unwelcome, though legal, ways to pay as little tax as possible. The think tank now proposes that these corporations’ profits are taxed at a worldwide minimum effective rate.

A step in the right direction, according to Associate Professor Tax Law Jan Vleggeert in Dutch newspaper FD. “This proposal goes much further than the action programme of 2015.” A minimum effective rate makes sense, because states will otherwise keep competing against each other in order to attract investments. Sovereignty will not be lost then, says Vleggeert. “Such sovereignty does not actually exist. For every reduction, the argument is that we are doing it because other states are also reducing their rates and we have to keep up.”

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