At the conclusion of the first G20 Finance Ministers and Central Bank Governors Meeting held in Sydney on Sun 23.2.2014, the Treasurer said they committed to implement policies to grow their collective GDP by more than 2% above the current trajectory over the next 5 years. He said that, realistically, “these policies could mean an extra US$2 trillion in global economic activity and tens of millions of additional jobs”.
Mr Hockey also said the leaders had made “solid progress in ensuring companies pay their fair share of tax”. Mr Hockey said a Common Reporting Standard was endorsed by the G20, allowing for the automatic exchange of tax information between jurisdictions. He said the standard will enhance transparency and reduce opportunities for tax evasion and avoidance. According to a G20 Communiqué of the meeting, the leaders “expect to begin to exchange information automatically on tax matters among G20 members by the end of 2015”. [The endorsed Standard was released by the OECD on 13 February 2014 – see above. It calls on jurisdictions to obtain information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. The Standard sets out (1) the financial account information to be exchanged, (2) the financial institutions that need to report, (3) the different types of accounts and taxpayers covered, as well as (4) common due diligence procedures to be followed by financial institutions.]
The Treasurer also said the leaders were “on track for a comprehensive global taxation plan on Base Erosion and Profit Shifting” (BEPS). The G20 Communiqué stated the leaders were “committed to a global response” to BEPS and that “profits should be taxed where economic activities deriving the profits are performed and where value is created”. Further, it stated that “by the Brisbane summit” [in November 2014], the leaders will “start to deliver effective, practical and sustainable measures to counter BEPS across all industries…”. It said exchange of information automatically on tax matters among G20 members is expected to begin to by the end of 2015.
Mr Hockey said the Communiqué sets “a comprehensive agenda for driving a return to strong, sustainable and balanced growth in the global economy” and reflects the shared goals of the Finance Ministers and Central Bank Governors.
Source:Treasurer’s media release, 23 February 2014
[LTN 36, 24/2/14]