The Finance Ministers of the G20 nations today resolved to tackle Base Erosion and Profit Shifting (BEPS) to make sure companies pay their fair share of tax.
"We have also agreed to increase transparency and crack down on tax evasion," said an official statement after the first day of the ministerial meeting of the G20, which among others is being attended by India's Minister of state for Finance Nirmala Sitharaman.
India has been at the forefront in raising the issues concerning tax avoidance and automatic exchange of information with a view to curbing tax evasion.
The G20 in 2013 had unanimously agreed to a 15 point action plan to check BEPS.
"This will help secure our revenue bases by limiting the opportunities for double non-taxation and ensuring a globally coordinated approach to international tax challenges," the statement said.
It further added that the G20, a grouping a developed and developing nations, is half way through an ambitious two year work program to update international tax rules for the 21st century.
The initiative would ensure that tax is paid where profits are made although it has become increasingly difficult to check the menace in view of digitalisation of economy.
The G20 ministerial meeting, which will be followed by a summit at Brisbane in November, will continue tomorrow.
The statement said "tomorrow the G20 will endorse the finalised common reporting standard for the automatic exchange of information.
"This will allow us to identify offshore income of multinationals and high wealth individuals, so there will be nowhere to hide".
In Cairns, the G20 is expected to agree to a multi-year agenda on tax and development.
Besides Sitharaman, RBI Governor Raghuram Rajan and Finance Secretary Arvind Mayaram are attending the meeting.
