News
BackApart from economic growth and climate targets, the group making up the 20 largest industrial and threshold countries also addressed tax offences and the regulation of financial markets during its meeting in Brisbane, Australia. Even though the adopted action plan shows a certain willingness for regulation, in many respects, it remains rather vague.
More investments for job creation and economic growth
The G20 countries agreed on a package of measures with the aim to achieve an additional 2.1 % increase in global growth by 2018 compared with baseline forecasts issued last year. The plan to reach this target is to reduce trade barriers and to increase investments in the infrastructure. According to the G20 Action Plan, this also requires an increase in long term financing, whose particular task it would be to support investments by SMEs. The aimed at target would be to create millions of jobs and in particular to significantly reduce youth unemployment. Another objective is to realise a greater participation rate of women in the labour market.
No regulation for shadow banks
In their final communiqué, the Member States stressed that they intended to do more to achieve a stable and robust financial market; however, they were largely reluctant to divulge concrete measures. The text mentions shadow banks, but their regulation has been postponed to an undefined future. Shadow banks is the name given to hedge funds, private equity funds and money market funds, all of which are engaged in quasi-banking transactions; however, they do not have a banking licence. Apart from that, they do not have any deposit insurance or access to the Central Bank, making them particularly vulnerable in cases of crisis. This business model has particularly grown since the financial crisis, as based on the increased regulation of banks, transactions have been increasingly shifted to the largely unregulated shadow banks. However, not only the increasing size of the sector is regarded as a danger to the financial system, but also its close links to the regular banking sector.
Common Reporting Standard for automatic exchange of tax information shall happen
Tax evasion too was a major subject matter at the G20 Summit. It had to be the target that states would pay their taxes where their profits were generated. To achieve this, it is the aim to establish a system of automatic exchange of tax information. According to the OECD, the aim is to establish it in all G20 Member States by 2018 at the latest. In particular the new EU Commission President Juncker backed such a system. Prior to the Summit, he had faced fierce criticism when it became known that during his time as Minister President of Luxembourg many individual agreements had been signed with large corporations in order to massively reduce their tax burden. Juncker has announced that he intended to implement such an information exchange system at European level. AK and ÖGB too have been supporting more transparency in respect of tax agreements for years.
Further information
OECD (2014) Standard for Automatic Exchange of Financial Account Information in Tax Matters
G20 Leaders' Communiqué, November 2014
The G20 countries agreed on a package of measures with the aim to achieve an additional 2.1 % increase in global growth by 2018 compared with baseline forecasts issued last year. The plan to reach this target is to reduce trade barriers and to increase investments in the infrastructure. According to the G20 Action Plan, this also requires an increase in long term financing, whose particular task it would be to support investments by SMEs. The aimed at target would be to create millions of jobs and in particular to significantly reduce youth unemployment. Another objective is to realise a greater participation rate of women in the labour market.
No regulation for shadow banks
In their final communiqué, the Member States stressed that they intended to do more to achieve a stable and robust financial market; however, they were largely reluctant to divulge concrete measures. The text mentions shadow banks, but their regulation has been postponed to an undefined future. Shadow banks is the name given to hedge funds, private equity funds and money market funds, all of which are engaged in quasi-banking transactions; however, they do not have a banking licence. Apart from that, they do not have any deposit insurance or access to the Central Bank, making them particularly vulnerable in cases of crisis. This business model has particularly grown since the financial crisis, as based on the increased regulation of banks, transactions have been increasingly shifted to the largely unregulated shadow banks. However, not only the increasing size of the sector is regarded as a danger to the financial system, but also its close links to the regular banking sector.
Common Reporting Standard for automatic exchange of tax information shall happen
Tax evasion too was a major subject matter at the G20 Summit. It had to be the target that states would pay their taxes where their profits were generated. To achieve this, it is the aim to establish a system of automatic exchange of tax information. According to the OECD, the aim is to establish it in all G20 Member States by 2018 at the latest. In particular the new EU Commission President Juncker backed such a system. Prior to the Summit, he had faced fierce criticism when it became known that during his time as Minister President of Luxembourg many individual agreements had been signed with large corporations in order to massively reduce their tax burden. Juncker has announced that he intended to implement such an information exchange system at European level. AK and ÖGB too have been supporting more transparency in respect of tax agreements for years.
Further information
OECD (2014) Standard for Automatic Exchange of Financial Account Information in Tax Matters
G20 Leaders' Communiqué, November 2014