Island signs up to fight profit shifting

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GUERNSEY has signed a multilateral information exchange agreement which aims to crack down on large companies unfairly minimising their tax bills.

'Base erosion and profit shifting' sees multinational enterprises exploit gaps and mismatches in tax rules to make profits 'disappear' for tax purposes or to shift profits to countries where no real business activity takes place but taxes are low, resulting in little or no overall corporate tax being paid.

Equality campaigners at Oxfam believe such strategies mean countries which are already poor and which carry out work for large corporations are losing out on $100bn per year.

This agreement is one strand of the Organisation for Economic Co-operation and Development attempts to tackle 'Beps'.

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