UK and Germany agree crackdown on tax loopholes

George Osborne has joined forces with the German finance minister, Wolfgang Schäuble, to announce an international crackdown on tax avoidance by multinational companies.

Osborne and Schäuble said they would back work by the Organisation for Economic Co-operation and Development to identify possible gaps in tax laws.

The joint statement by the two countries admits, that "international tax standards have had difficulty keeping up with changes in global business practices, such as the development of e-commerce in commercial activities."

The two countries add: "As a result, some multi-national businesses are able to shift the taxation of their profits away from the jurisdictions where they are being generated, thus minimising their tax payments compared to smaller, less international companies."

In the statement, Britain and Germany say they expect the first report from the OECD at the next G20 meeting in Russia in February 2013, reports the Guardian.