Simon Henry, finance director of the FTSE 100 oil giant, called for urgent government action, and said that a fragmentation of tax rules would cause uncertainty in the market and could lead to double taxation.
“I am not being apocalyptic but you don’t have to change the psychology too much to have a big impact on the willingness to carry out cross-border investment and trade,” the Financial Times quoted him as saying.
He warned that “weak compromise” on elements of the international efforts to addresses BEPS could lead to unilateral action by certain governments, including those in China and Brazil.
He also said the UK’s diverted profits tax was a “backwards step”, and that it undermined respect for the UK’s commitment to multilateralism, the FT said.
Global efforts to crack down on avoidance have come in response to public outcry over the apparent failure of certain multinationals to pay their fair share of tax through the use of a variety of profit shifting schemes.
His comments come as US tax campaign group Americans for Tax Fairness revealed that Walmart has a “vast, undisclosed network” of subsidiaries and branches in known tax havens, which could minimize its taxes on foreign earnings.