G8 Summit Leaders Agree To Crack Down On Tax Avoidance with New Lough Erne Declaration, Setting Out Tax Data Sharing Principles

World leaders at the G-8 summit meeting in Ireland pledged to tackle tax avoidance on Tuesday, outlining the broad strategy they plan to adopt.

The Lough Erne Declaration says the eight advanced industrial nations will share tax information, seek to uncover shell company ownership structures and ensure that multinational companies don’t shift profits offshore to tax havens.

While tax evasion by a corporation entails breaking existing tax laws, tax avoidance -- which the G-8 wants to minimize -- entails conducting business so as to legally minimize taxes.

Participants at the meeting agreed that multinational companies should inform tax authorities about how much tax they pay and where, but didn’t specify how they’d force influential corporations to readily produce this information.

In a longer communique, the countries also pledged to work with the Organization for Economic Cooperation and Development to develop a global model for tracking tax evaders, partly by automatically sharing tax data.

National registries to reveal who owns and profits from companies were suggested, but not promised or mandated for all G-8 nations.

“We commit to playing our part in developing global solutions to the problems of tax evasion and tax avoidance,” reads the communique.

Perhaps the most immediate concrete step was taken by the U.K., which announced it will develop a national database with information on corporate “beneficial ownership.” It isn’t clear if the database will be publicly available.

In recent weeks, there has been public outcry over U.S. companies taking profits overseas to avoid taxes, with Apple (Nasdaq:AAPL) in particular singled out for criticism by U.S. lawmakers.