OECD Claims Tax Transparency Advances

www.bethelfinance.com/rm

 The Organization for Economic Cooperation and Development ( OECD ) has presented a progress report to the G20 nations' Finance Ministers and Central Bank Governors, reporting back on initiatives to tackle tax evasion, tax base erosion and profit shifting .
 The report covers three strategic initiatives:

- Progress reported by the Global Forum  on Transparency and Exchange of Information for Tax Purposes including the upcoming ratings of jurisdictions' compliance with the Global Forum's standards on exchange of information on request;

- Efforts by OECD  to strengthen automatic exchange of information;

- Latest developments to address tax base erosion and profit shifting, a practice that can give multinational corporations an unfair tax advantage over domestic companies and citizens.

 The Global Forum, set up in 2000 to agree global tax standards, now has 119 member countries and jurisdictions. Since 2009, when the G20 called for effective implementation of the internationally agreed standard of information exchange, the Forum has published 100 peer review reports. Most countries have completed the first phase of the reviews which looks at legal frameworks. Fourteen are not moving to the second phase due to deficiencies in their legal frameworks. After it completes a set of Phase 2 reviews, looking at effectiveness of the information exchange practices, the Global Forum will start rating countries' implementation of the standards on the basis of a four-tier classification system : "compliant", "largely compliant", "partially compliant" and "non-compliant". The results of the ratings exercise for the first set of reviews will be completed by year end, with the allocation of overall ratings to approximately 50 tax jurisdictions.
 Next, relaying progress towards the development of a common model for the automatic exchange of bank information, OECD Secretary-General Angel Gurria said: " The political support for automatic exchange of information on investment income has never been greater. Luxembourg has changed its position and the US Foreign Account Tax Compliance Act legislation is triggering rapid acceptance of automatic exchange and propelling European countries to adopt this approach amongst themselves. In response to the G20 mandate to make automate exchange or information the new standard, the OECD is developing a standardized, secure and effective system of automatic exchange."
 The report identifies the Multilateral Convention on Mutual Administrative Assistance in Tax Matters as the ideal legal instrument for multilateralising  automatic exchange of information. Over 50 countries have either signed or committed to sign; more are expected to sign the Convention at a ceremony to be held at OECD headquarters on May 29, 2013.
The report also provide an update on the OECD's work on Base Erosion and Profit Shifting nothing that an Action Plan will be delivered to the Moscow meeting of G20 Finance Ministers meeting in July 2013.