The Organization for Economic Cooperation and Development has proposed a plan for cracking down on tax-avoidance strategies by companies such as Google, Apple and Yahoo!This follows hearings in the US and UK revealing how companies avoided billions in taxes by attributing profits to mailbox subsidiaries in places like here in Bermuda and the Cayman Islands.California-based Google, for example, avoided as much as $2 billion in worldwide income taxes annually by attributing profits to a subsidiary in Bermuda that holds the rights to its intellectual property for sales outside the US, as reported by Bloomberg News in December.Though there is no real economic activity going on in Bermuda “all the returns are in Bermuda,” Pascal Saint-Amans, director of the Center for Tax Policy and Administration for the Paris-based OECD, said, not referring specifically to Google. “This is wrong, we need to fix it.”The G20 Friday backed the "fundamental" rethink of the rules on taxing multinational corporations, and released an action plan drawn up by the OECD.The proposal aims to develop rules over the next two years preventing companies from escaping taxes by putting patent rights into shell companies, taking interest deductions in one country without reporting taxable profit in another, and forcing them to disclose to regulators where they report their income around the world."People and companies have to pay the taxes that are due. It's the only way to operate in a fair and competitive society," said British finance minister George Osborne.German Finance Minister Wolfgang Schaeuble said without “fair burden sharing, in the end we will destroy even a global, open economy”.The 40-page report will complement efforts by deficit-laden governments to increase revenue they collect from profitable enterprises.The UK Parliament has held three hearings since November on corporate tax dodging — examining strategies used by Google, Amazon and Starbucks Corp.In May, the US Senate held a hearing on Apple’s offshore tax strategies. The companies all say they’ve complied with international tax laws.“It is clear multinational companies have developed an unprecedented know-how for minimising their worldwide tax pressure,” French Finance Minister Pierre Moscovici said in Moscow. “These situations are literally impossible to explain to our fellow citizens.”A pair of the OECD proposals calls for rules to make it harder to shift profits by assigning intellectual property, such as patent rights, to offshore units.Under current law, such offshore subsidiaries can take credit for profits arising from patents developed in countries like the US and UK, generally with cash the parent companies provided to them in the first place.The OECD is a government-funded think tank that was charged by the G-20 to tackle the issue.UK Prime Minister David Cameron said the OECD report “shows how taxpayers, governments and businesses all suffer when some companies manipulate the tax system to avoid paying their fair share of taxes. And it highlights how much we still have to do to bring the international tax system, conceived back in the 1920s, into the 21st century.”Bloomberg reported that although the UK has been accelerating its own efforts to help multinationals avoid taxes, Cameron said in a statement that he would highlight the OECD plan at the G-20 Summit in St. Petersburg in September.