Tax experts say the effectiveness of a raft of internationally focused recommendations to stop corporate tax avoidance depends on the approach of each country.
The Organisation for Economic Cooperation and Development released the final recommendations of its two-year, G20-commissioned base erosion-and-profit-shifting project, otherwise known as BEPS, on Monday.
It aims to claw back as much $US240 billion ($A338.72 billion) in lost revenue each year through dodgy tax practices across the globe.
“The OECD should be commended for issuing its recommendations, but whether this constitutes a game-changing moment depends on each country,” Zara Ritchie at tax consultants BDO told AAP on Tuesday.
The BEPS measures include new minimum standards for country-by-country reporting, which will, for the first time, give tax administrators a global picture of operations of multinational enterprises.
They also aim to stop companies being set-up purely to channel investments into tax havens, curbing harmful tax practices and ensure the fight against double non-taxation does not result in double taxation.
David Watkins, a partner at Deloitte, said existing rules can no longer cope with the globalised, digitised, innovative economy of the 21st century.
The changes will have major impacts on governments, multinational corporations, their management, boards of directors, professional advisers and tax authorities globally.
“Collectively, the international tax system will be made significantly more robust,” he said.
But head of tax at EY Australia, Craig Robson, wants a considered approach by Australia, saying any new rules must be clear to limit any disruption to businesses operating across borders and don’t result in unintended consequences.
“It is also almost certain that the volume and complexity of the change involved in these recommendations will create uncertainty and increase the risk of tax disputes,” he told AAP.