National trade unions from around the globe have agreed to tackle “deeply damaging” aggressive tax avoidance in pension funds by revamping international tax rules.
The International Trade Union Confederation's (ITUC) statement, which was unveiled yesterday, supports changes to the rules to encourage “fair and responsible” tax practices with pension funds, and includes a 15-point plan, which aims to ensure taxable profits are declared where business has occurred.
The trade union statement said that the global scale of pensions “creates an opportunity to further advance responsible tax policy and practices”.
The body also added: “It is important that pension funds and other long term asset owners mark their difference and raise their voice to support, not weaken this global tax agenda.”
The initiative, which was proposed by the G20 OECD Action Plan on Base Erosion and Profit Shifting (BEPS), has been signed by 45 trade unions from 19 countries, including the US, UK, Japan, Germany and Canada.
The policy encourages corporate country-by-country tax reporting and calls upon pension funds to address tax risks and evaluate existing investments.
"Fierce resistance"
Concerns have also been raised about the “fierce resistance” towards the initiative with business groups pushing against the G20-endorsed plan.
General secretary at the ITUC, Sharan Burrow, said: “Some powerful finance and business interests are still trying to undermine international cooperation to put an end to the seemingly endless scandal of dodgy tax dealings, particularly by some notorious multinational companies.”
“These tax tricks are deeply damaging to governments’ fiscal positions, and also hurt competitor companies which do pay their fair share.
“Governments need to regulate to ensure that companies can no longer escape tax obligations, and we are now seeing this issue move to centre-stage in pension funds.”
The reformed international tax rules are expected to come into force at the end of 2015.
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