Last week’s Cannes summit of G20 leaders offered ‘some limited hope’ for financial transparency and meaningful action on tax evasion and aggressive avoidance, according to campaigners.
‘The G20 is taking slow steps forward but could still do more to tackle the endemic tax dodging and corruption that are keeping poor countries poor,’ said Raymond Baker, Director of the Task Force on Financial Integrity and Economic Development.
G20 members said they were committed to protecting public finances and the global financial system from the risks posed by ‘tax havens and non cooperative jurisdictions’, adding that the damage caused was ‘particularly important’ for the least developed countries.
Their 'final declaration' noted that the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes now has 105 member jurisdictions.
‘More than 700 information exchange agreements have been signed and the Global Forum is leading an extensive peer review process of the legal framework (phase 1) and implementation of standards (phase 2), it said.
The G20 asked the Global Forum to complete the first round of phase 1 reviews and ‘substantially advance’ the phase 2 reviews by the end of 2012.
Many of the 59 jurisdictions reviewed so far were ‘fully or largely compliant’ or ‘making progress’, the G20 observed. It urged all the jurisdictions to tackle deficiencies identified in the reviews, in particular ‘the 11 jurisdictions whose framework does not allow them at this stage to qualify to phase 2’.
Information exchange
International exchange agreements were ‘starting to yield real results as mechanisms for the proper enforcement of tax laws, said Mike Rawstron, Chair of the OECD Global Forum, in Tax Transparency 2011: Report on Progress, a report presented to the G20.
In a separate report titled The Era of Bank Secrecy is Over, the OECD said G20 and OECD efforts on information exchange were paying off: ‘Almost €14bn in additional tax revenue have been secured in the past two years in 20 countries where data is available and there is far more to come.'
Additional tax revenues would make a ‘substantial’ contribution to fiscal consolidation without raising tax rates.
However, further work was needed to ensure that ‘all countries rapidly achieve a comprehensive and effective exchange of information’ and to ‘improve tax compliance by the corporate sector and to tackle aggressive corporate tax strategies’.
Tax and development
The G20 said: ‘Consistent with the Multi-Year Action Plan agreed [last year] in Seoul, we strongly support developing countries' mobilization of domestic resources and their effective management as the main driver for development.
‘This includes technical assistance and capacity building for designing and efficient managing of tax administrations and revenue systems and greater transparency, particularly in mineral and natural resource investment.
‘We urge multinational enterprises to improve transparency and full compliance with applicable tax laws. We welcome initiatives to assist developing countries, on a demand-led basis, in the drafting and implementation of their transfer pricing legislation.
‘We encourage all countries to join the Global Forum on Transparency and exchange of information in tax purposes.’
Mutual assistance
All G20 governments have now signed up to a multilateral convention on mutual administrative assistance in tax matters, the OECD announced.
The convention facilitates automatic exchange of information and ‘multilateral simultaneous tax examinations’, and covers ‘a much wider range of taxes’ than bilateral treaties, it said.
The G20 encouraged other jurisdictions to join the convention, adding that ‘in this context, we will consider exchanging information automatically on a voluntary basis as appropriate’.
Last week’s Cannes summit of G20 leaders offered ‘some limited hope’ for financial transparency and meaningful action on tax evasion and aggressive avoidance, according to campaigners.
‘The G20 is taking slow steps forward but could still do more to tackle the endemic tax dodging and corruption that are keeping poor countries poor,’ said Raymond Baker, Director of the Task Force on Financial Integrity and Economic Development.
G20 members said they were committed to protecting public finances and the global financial system from the risks posed by ‘tax havens and non cooperative jurisdictions’, adding that the damage caused was ‘particularly important’ for the least developed countries.
Their 'final declaration' noted that the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes now has 105 member jurisdictions.
‘More than 700 information exchange agreements have been signed and the Global Forum is leading an extensive peer review process of the legal framework (phase 1) and implementation of standards (phase 2), it said.
The G20 asked the Global Forum to complete the first round of phase 1 reviews and ‘substantially advance’ the phase 2 reviews by the end of 2012.
Many of the 59 jurisdictions reviewed so far were ‘fully or largely compliant’ or ‘making progress’, the G20 observed. It urged all the jurisdictions to tackle deficiencies identified in the reviews, in particular ‘the 11 jurisdictions whose framework does not allow them at this stage to qualify to phase 2’.
Information exchange
International exchange agreements were ‘starting to yield real results as mechanisms for the proper enforcement of tax laws, said Mike Rawstron, Chair of the OECD Global Forum, in Tax Transparency 2011: Report on Progress, a report presented to the G20.
In a separate report titled The Era of Bank Secrecy is Over, the OECD said G20 and OECD efforts on information exchange were paying off: ‘Almost €14bn in additional tax revenue have been secured in the past two years in 20 countries where data is available and there is far more to come.'
Additional tax revenues would make a ‘substantial’ contribution to fiscal consolidation without raising tax rates.
However, further work was needed to ensure that ‘all countries rapidly achieve a comprehensive and effective exchange of information’ and to ‘improve tax compliance by the corporate sector and to tackle aggressive corporate tax strategies’.
Tax and development
The G20 said: ‘Consistent with the Multi-Year Action Plan agreed [last year] in Seoul, we strongly support developing countries' mobilization of domestic resources and their effective management as the main driver for development.
‘This includes technical assistance and capacity building for designing and efficient managing of tax administrations and revenue systems and greater transparency, particularly in mineral and natural resource investment.
‘We urge multinational enterprises to improve transparency and full compliance with applicable tax laws. We welcome initiatives to assist developing countries, on a demand-led basis, in the drafting and implementation of their transfer pricing legislation.
‘We encourage all countries to join the Global Forum on Transparency and exchange of information in tax purposes.’
Mutual assistance
All G20 governments have now signed up to a multilateral convention on mutual administrative assistance in tax matters, the OECD announced.
The convention facilitates automatic exchange of information and ‘multilateral simultaneous tax examinations’, and covers ‘a much wider range of taxes’ than bilateral treaties, it said.
The G20 encouraged other jurisdictions to join the convention, adding that ‘in this context, we will consider exchanging information automatically on a voluntary basis as appropriate’.
