We agree…to take action against non-cooperative jurisdictions, including tax havens. We stand ready to deploy sanctions to protect our public finances and financial systems. The era of banking secrecy is over.

“We are committed to developing proposals, by end 2009, to make it easier for developing countries to secure the benefits of a new cooperative tax environment.”

“We have committed ourselves to work together with urgency and determination to translate these words into action.”

London Summit, Final Declaration, April 2009


With the global economy reeling from the 2008 financial crisis, the G20 at the London Summit seemingly took bold decisive action on tax havens. Two years on, with the world’s attention on the Eurocrisis, the G20 have again reiterated strongly the need for further tax transparency. With the political will in place, we need to evaluate how the G20 delivers real progress.

Has the G20 failed to live up to its commitments on tax havens? Have commitments to developing countries on tax been delivered? The first step is to analyse whether the G20 is willing to follow the expert opinion that it has commissioned itself, from intergovernmental organisations and international financial institutions.

This scorecard attempts to do this. We have analysed the recommendations made, with what the G20 actually delivered. While we comment here and elsewhere on the recommendations of these International Organisations we do not endorse their report. Rather, the scores that we attribute to the G20 simply evaluate their response to that expert opinion.

On this objective analysis of tax issues, the G20’s welcome political commitment has been translated to decisive action on only one of twelve suggested actions, while some tentative progress has been made on only three other issues.



The G20 has urged Multinationals to improve transparency and full compliance with applicable tax laws. This sends a strong political message to Multinationals that tax dodging is no longer OK in developing countries and provides civil society and governments with the political backing to stand up to companies.


‘Could do better’

The G20 agreed strong support for capacity building for designing and efficient managing of tax administrations and revenue systems. But they failed to commit any finance to make this a reality.

All G20 countries agreed to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters – a tool to facilitate exchange of tax information – and have offered to exchange information automatically, although only on a voluntary basis. While this sends a strong signal that the crackdown on tax evasion is a priority, loopholes and caveats within the agreement mean that it could remain ineffective. We need evidence that this agreement is actually working and that secrecy jurisdictions will be strongly invited to participate before we know whether it is worth developing countries signing on.

The G20 has encouraged International Organisations to strengthen their programmes to assist developing countries diagnose their transfer pricing legislative needs and adopt, and then effectively implement, transfer pricing rules. This is clearly something that many developing countries want and need – in order to challenge the abusive transfer pricing which costs billions in lost revenue every year. But the G20 failed to commit any resources to this.



The G20’s major opportunity lay in pressurising tax havens to share information with developing countries to live up to its 2009 commitments. This is a missed opportunity for the world’s leaders to take a leadership position.

The International Organisations suggested that the G20 look into the feasibility of making further improvements to the transparency in reporting tax information by MNEs taking into account existing regulatory proposals for the extractive industry developed by the US and EU. Yet the G20 failed to make recommendations on this.

The International Organisations suggested that G20 countries disclose information on tax exemptions in their own countries thus showing a leadership position – but the G20 did not act on this.

The International Organisations recommended G20 countries undertake an analysis of the impact of G20 countries tax policies on other countries. – but again the G20 failed to act.



International Organisation’s recommendations

Our analysis of the International Organisation’s recommendations

G20’s response to the International Organisations’ recommendations

Score card

We commit to deepening international co-operation and strengthening long term support to developing countries to help them mobilise domestic tax resources fairly and effectively, as the cornerstone of statebuilding, social inclusiveness and better governance.


Review the level of our assistance dedicated to supporting tax systems in developing countries.Developing countries desperately need additional resources to help them collect taxes. But concrete financial commitments must be made.Strong support for capacity building for designing and efficient managing of tax administrations and revenue systems. But no financial commitments or specific action plans are in place.
Undertake ‘spill over’ analyses of the impact of any significant changes in our own tax systems on those of developing countries, and support efforts to develop tools to counter tax evasion and avoidance in developing countries.Analysing the impact of G20 tax systems to ensure they aren’t undermining the ability of developing countries is crucial. The report cites the move from worldwide to territorial tax systems, an example of which is theUK’s corporate tax reforms, including changes to its Controlled Foreign Company rules.No recommendation or action.
Share our efforts to identify, quantify and make more transparent tax expenditures and request the international organisations to develop an analytical framework to assess the cost & benefits of special tax treatments and develop guidance for countries using tax incentives to attract FDI.Developing countries often face pressure to agree tax incentives with companies – and often these don’t deliver any benefit to the country. This analysis would equip countries with the information they need to stand up to companies.No recommendation or action.
Make transparent our exemptions on ODA funded goods and services, and encourage other donors to follow.Leading by example to ensure transparency in the tax treatment of aid is strongly welcomed.No recommendation or action.
Link tax and expenditure in our assistance programmes, ensuring taxation promotes state-building, accountability and equity, encouraging other donors to do likewise.Increased tax revenue will only deliver for the poor if it is used to provide services and increase prosperity. The consideration of equity is crucial from a development perspective.No recommendation or action.
We will require Multinational Enterprises to improve tax transparency and compliance in developing countries and place good tax compliance more firmly at the centre of their corporate governance and risk assessment systems.


Promote the Multilateral Convention on Administrative Assistance in Tax Matters, support spontaneous information sharing in international tax fraud cases and include anti treaty shopping provisions in our tax treaties with developing countries.NGOs have long been calling for a multilateral convention allowing for automatic information exchange. This is a welcome step forward, but we need pressure for tax havens to sign, and we need to know this is working before developing countries commit scarce resources to it. There are plenty of loopholes in this agreement that need to be monitored carefully. We need evidence for the effectiveness of the convention before we know if it will deliver for developing countries.The multilateral convention has been agreed by G20 states. Other jurisdictions have been strongly invited to sign but no significant pressure has been put on tax havens to do so.


The G20 made no statements on spontaneous exchange of information, nor their double taxation treaty policy towards developing countries.



Request international organisations to advise G-20 leaders on how to make improvements in the transparency in the operations of MNEs in developing countries, taking into account the current debate on country-by-country reporting, best practice in business, and developments in national legislation (e.g. Dodd Frank in the US).Multinational transparency is crucial. The IOs call for more investigation into country by country reporting – a crucial tool in the fight against tax dodging. A call from the G20 to the IASB to implement CbyC would be a crucial step towards tax transparency.Only a vague reference encouraging G20 members to explore “voluntary standards on the disclosure of payments to governments by MNEs.”
Strongly encourage MNEs to provide the relevant and necessary information to developing countries in which they operate, and apply domestic rules to ensure that the transfer pricing practices of any particular entity do not result in a misallocation of profit out of its jurisdiction.MNEs need to be more transparent about their operations and need to be more responsible in their tax strategies. MNEs should be obliged to give the full list of their subsidiaries and their location in order to help tax administrations to control transfer pricing properly.The G20 urge multinational enterprises to improve transparency and full compliance with applicable tax laws.


Urge international organisations and other donors to strengthen their programmes to assist developing countries to effectively implement transfer pricing rules, in the context of their broader tax administration capacity development efforts.Many developing countries have been calling for assistance with transfer pricing. This call needs to respect the needs of developing countries rather than forcing standards which were designed by and for OECD countries.The G20 welcome initiatives to assist developing countries, on a demand led basis, in the drafting and implementation of their transfer pricing legislation.
We commit to working with developing countries to track results from their own revenue raising efforts and the efforts of their international partners.
Encourage international organisations to map assistance programmes on an ongoing basis, improve the reporting of those programmes, and develop dedicated knowledge management platforms.This would help coordination in line with theParisprinciples on aid effectiveness.No recommendation or action.
Share our own benchmarking of performance and structure of our tax administrations; support international and regional organisations (e.g. ATAF) to benchmark tax administrations and to develop a core set of indicators to monitor and assess capacity improvement in tax administrations and other revenue related areas.Benchmarking and sharing best practice across developing countries is of value – though care needs to be taken that this does not become a form of harmful conditionality restricting the ability of poor countries to set their own tax policies.No recommendation or action.
Urge international and regional organisations to improve the quality and consistency of statistics on tax systems of developing countries.To design effective tax policy researchers need quality information. NGOs have long been calling for international organisations to share data with researchers.No recommendation or action.


For more information please contact David McNair dmcnair@christian-aid.org +44 20 75232034 or Mathilde Dupré m.dupre@ccfd.asso.fr +33 1 44 82 81 23.