THE recovery of the oil and gas sector is seriously under threat from a new international tax evasion regime, according to a Scottish tax expert.

Ian Williams, an international tax expert and chairman of Glasgow-based accountancy firm Campbell Dallas, said new rules designed to stop businesses artificially shifting profits to low or no-tax locations could be particularly problematic for multinationals looking to restructure operations in different countries.

He is calling for the issue to be discussed this week at the industry’s flagship Offshore Technology Conference in Houston, which attracts 90,000 industry professionals from more than 120 countries.

“Restructuring creates a trail of liabilities that need to be disclosed in line with the new international tax order,” Mr Williams said of the incoming OECD regime. This is designed to address the practice known as ‘base erosion and profits shifting’, where businesses exploit international tax loopholes to make their profits effectively disappear. Up to $240 billion a year is thought be lost in global corporate income tax revenues from these practices.

“When a business is focused on cost cutting and survival, it often loses sight of its tax liabilities,” Mr Williams continued. “It is important that delegates to the Offshore Technology Conference ensure international tax is considered during discussions on restructuring”.

Businesses that overlook this new regime and fail to comply could suffer major penalties or time-draining investigations by HMRC and other national tax authorities.

“Companies will need to be more transparent, publish their tax strategy, demonstrate compliance, and be open to public scrutiny on matters which were previously confidential,” Mr Williams added.