IN a bid to put an end to banking
secrecy in tax matters, the OECD has released the full version of
a new global standard for the exchange of information between jurisdictions.
The
Standard for Automatic Exchange of Financial Account Information in Tax Matters
calls on governments to obtain detailed account information from their financial
institutions and exchange that information automatically with other jurisdictions
on an annual basis. The Standard, developed at the OECD under a mandate from
the G20, was endorsed by G20 Finance Ministers in February 2014, and approved
by the OECD Council.
The Standard provides for annual automatic exchange between governments of
financial account information, including balances, interest, dividends, and
sales proceeds from financial assets, reported to governments by financial
institutions and covering accounts held by individuals and entities, including
trusts and foundations. The new consolidated version includes commentary and
guidance for implementation by governments and financial institutions, detailed
model agreements, as well as standards for harmonised technical and information
technology solutions, notably a standard format and requirements for secure
transmission of data.
The
OECD will formally present the Standard to G20 Finance Ministers at their
next meeting in Cairns, Australia, on 20-21 September.
More
than 65 countries and jurisdictions have already publicly committed to implementation,
while more than 40 have committed to a specific and ambitious timetable leading
to the first automatic information exchanges in 2017. This includes a group
of OECD and non-OECD countries which have adhered to the OECD Declaration
on Automatic Exchange of Information in Tax Matters as well as a group of
early adopters.
More jurisdictions are expected to commit to implement the Standard in the
run up to the late-October meeting of the Global Forum Transparency and Exchange
of Information for Tax Purposes on which brings together more than 120 countries
and jurisdictions, to be held in Berlin and hosted by the German Ministry of
Finance. At this occasion a signing ceremony is expected to be held for a new
multilateral agreement that activates automatic exchange once legislation and
other conditions are in place. Assistance will be available to support less
developed countries, so they benefit from this move towards a more transparent
tax environment, and international organisations are ready to co-operate to
support these countries.
Even before the Standard has become operational, the drive toward greater
transparency and better exchange of information is having a tangible effect
on taxpayer behaviour. OECD analysis of voluntary disclosure programmes since
2009 shows that more than half a million taxpayers have voluntarily disclosed
income and wealth hidden from their tax authorities. Countries have identified
more than EUR 37 billion from voluntary disclosure programmes which OECD encourages
countries to consider.
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