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The era of bank secrecy is coming to an end
In London the G20 announced the end of bank secrecy; since
then there has been unprecedented action to implement the
OECD initiated and now globally endorsed standards of
transparency and exchange of information in tax matters:
Since
April over 90 tax information exchange agreements have been
signed and over 60 tax treaties negotiated or renegotiated
to incorporate the standards; All major on and offshore
centres have now endorsed the standards and those which had
impediments to implementing them are in the process of
removing them.
I have updated the Progress Report I provided on 2nd April
on an almost daily basis to reflect these ongoing
developments (read the latest
Progress Report)
But the work is far from finished. There are still
some jurisdictions that committed long ago to implement the
standards but have not delivered. We must also ensure
that an effective network of agreements is in place to deter,
detect and pursue tax evaders.
Moving forward on the London Summit mandates
The international community has called for a strengthening
of the Global Forum, the development of a robust peer review
process, the speeding up of the negotiation process and an
engagement with developing countries. When the Global
Forum met in Mexico on 1-2 September it responded to this
call for action by:
-Expanding
its membership and putting in place a transparent governance
and financing structure with 10 of the 15 members of the
Steering Group from G20 countries;
-Establishing a two-phase peer review process which will be
universal and transparent;
-Endorsing a proposal for a multilateral Tax Information
Exchange Agreement and encouraging the OECD to
advance quickly in updating and opening up the joint
OECD/Council of Europe Multilateral Convention for
Administrative Assistance in Tax Matters, all of which will
help speed up the negotiating process; and
-Noting that the OECD’s Development Assistance Committee and
Centre for Tax Policy and Administration had initiated work
to build up capacity in tax administrations in developing
countries so that they can benefit from this new open
environment.
-These decisions translate the G20 political support into
actions which will have far reaching consequences for tax
compliance around the world.
The need to move forward rapidly
The priority for the next six months is to advance quickly
on the peer reviews and the monitoring of agreements. This
will begin on 14 October when the Peer Review Group which
was created in Mexico will have its first meeting. First
results will be available early in 2010. Work on
countermeasures will continue and in January 2010 the OECD
will host a high level meeting between tax and aid officials
to identify the ways that developing countries can benefit
from the more transparent environment, including the use of
multilateral instruments.
Status reports in each of these areas will be made available
to G20 Finance Ministers when they meet in St Andrews next
November.
Further reading
-
Moving Forward on the Global
Standards of Transparency and Exchange of Information for
Tax Purposes
- Latest
Progress Report
listing where jurisdictions stand in implementing the
international standard.
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www.oecd.org/tax/evasion
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www.oecd.org/g20
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