By Daniel Hunter

UK Prime Minister David Cameron, speaking at the World Economic Forum in Davos, has said that countries must work together to clamp down on tax avoidance.

Having addressed business leaders in London yesterday on the UK's role in Europe, Cameron has now said that "individuals and businesses must pay their fair share" of taxes.

Yesterday he called for negotiations on the UK's place in the European Union, followed by a referendum, and has followed that up by saying that "trade, tax and transparency" were the UK's economic priorities.

Those that avoid tax "need to wake up and smell the coffee" - an apparent reference to US coffee giant Starbucks, which was widely castigated for paying little tax in the UK but then pledged to pay millions of pounds in corporation tax after a backlash.

Other multinationals Amazon and Google have also come under fire for paying little UK tax.

Mr Cameron said that cutting down on tax avoidance was one of the UK's main priorities for its presidency of the G8 group of richest nations in 2013.

"There are some forms of tax avoidance that have become so aggressive" that it is time for international co-operation to make sure that global companies pay their fair share of tax, he said.

"This is a problem for all countries, not just for Britain," he said.

The prime minister also defended his choice to offer a referendum on the EU after 2015, if the Conservatives win the next election, and said that the 27-member bloc needed to change.

"Europe is being out-competed, out-invested and out-innovated," Mr Cameron said.

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