, WASHINGTON, Jun 4 – Major US companies are pushing back against an effort to reform the global taxation system to prevent multinational businesses from exploiting differing national tax rules and loopholes.
The influential Business Roundtable, a gathering of top US chief executives, said in a letter to US Treasury Secretary Jacob Lew that the project to close gaps in taxation of cross-border income threatens their businesses and US workers.
The project by the Organization for Economic Cooperation and Development could result in “new, unprecedented taxes on trade and investment that will freeze business investment and slow economic growth,” they said.
The Roundtable spoke out as the OECD pushes forward with its program to help ensure companies don’t hide taxable income in more favourable jurisdictions, or via accounting tricks.
The project has gained support of governments and social groups angered over tax avoidance.
The Business Roundtable said in its letter to Secretary Jacob Lew that the existing system has effectively avoided double taxation of companies, making cross-border investment and trade easier.
Many of their members fear, they said, that the BEPS project is now “being used by some governments for the purpose of imposing extraterritorial taxes on US business income.”
“Increased taxation of US business investment by foreign governments and the inevitable increase in protracted cross-border tax disputes will slow the US economy and hurt American workers.”