Global Forum submits results to G20 summit
Opening a meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes in Paris on 25-26 October, OECD Secretary General Angel Gurria said the success of the Global Forum can be measured in the fact that during the past two years more than 100,000 taxpayers have revealed previously undetected offshore assets, resulting in 14 billion euros additional tax revenue.
He noted governments had signed more than 700 agreements to exchange tax information and said 20 countries had benefitted from this more transparent environment by launching voluntary initiatives to disclose previously undeclared offshore assets.
“We know that 20 countries have taken advantage of this more transparent environment, putting in compliance initiatives which have already yielded €14 billion in additional revenues from more than 100,000 wealthy tax payers who had hidden assets offshore and that there’s more in the pipeline,” Mr. Gurria said.
At the same time, the message is also getting through to financial institutions, Mr. Gurria argued.
“Banks are changing their attitude to offshore evasion,” he said. “Those that counted on bank secrecy to gain a competitive edge are now focusing on the services they provide.”
He said the OECD’s battle for fairer tax systems was being won on two fronts: by jurisdictions amending their domestic laws and by expanding the network of tax information exchange agreements.
“Over the past two years, the number of requests under these agreements has gone from almost zero to thousands. It is now no longer possible to hide assets or income without risking detection,” he said.
At a time of stalled economies and a crisis of politics, Mr. Gurria said, the Global Forum’s “collective tax work is a tangible example of countries moving together in a mutually beneficial direction that will help those trying to extricate themselves from the crisis”.
The meeting of the Global Forum, which brought together delegates from 85 jurisdictions and seven international organisations at the OECD headquarters in Paris, adopted a progress report that will be delivered to the G20 based on 59 completed peer reviews. In addition, the Global Forum agreed guidelines for the coordination of technical assistance and decided to convene a meeting of countries to focus on the effectiveness of exchange of information.
At the Seoul Summit a year and a half ago, leaders of the G20 asked the Global Forum to report on the status of the international standard on tax transparency at the G20 Summit in Cannes on 3-4 November, 2011. To meet this request, the Global Forum has adopted another 18 reports, bringing the total number of completed peer reviews to 59. The peer reviews identify deficiencies, make recommendations on how to address them and, in the case of the serious deficiencies, can prevent a jurisdiction from moving on to the next stage in the review process.
Overall, however, the 59 peer review reports that have so far been conducted show the level of compliance is high and cooperation has been good, the OECD said.
Many of the 370 recommendations given in the reports to improve the exchange of information have already been acted upon. A small number of jurisdictions will not pass to the next stage of the review process because the deficiencies were sufficiently serious, the OECD said. The organisation will release further details in the Progress Report which will be submitted to the G20 and published as part of the Global Forum Annual Report immediately following the G20 Summit.
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