Mr. Pascal Saint-Amans:

Matters can be more complicated than what the Deputy has just described. If a country does not do anything and keeps going on with the current taxation regime, then it faces the risk that its partners will take defensive measures. To put it another way, what is at stake is our ability to protect the set of rules designed to eliminate double taxation. What do businesses need? They need to be taxed only once in cross-border investments. They cannot be taxed twice because this would have a major impact on the allocation of capital. This would not be good for economic growth or employment. What is at stake is reaching the balance where on the one hand all countries are keen on facilitating businesses headquartered on their territory but at the same time not offering them such a benefit that it will be rebuked by unilateral domestic legislation by other countries. That is why we have been able to reach an agreement on a plan in this regard even with countries that are hesitant about this. It is in the interests of all collectively that we have rules which work.

The real prize would be that corporation and income tax, as decided by individual countries, would be paid by companies which have used loopholes to avoid paying it before. At a time of fiscal constraint and financial and budgetary crises, one cannot afford to have implicit subsidies to companies.

Most of the plan will be OECD recommendations. Some of them will be to change domestic legislation to neutralise, for example, hybrid mismatches. Part of it will also be on changing tax treaties which will be international tax legislation, not domestic.