The international community should call time on all remaining holdouts who have yet to implement internationally agreed tax transparency standards, OECD Secretary-General Angel Gurría said in a new report to the G20.
The report, delivered today [14 April 21016] to G20 Finance Ministers meeting in Washington DC, points out that a number of jurisdictions have yet to properly implement the exchange of tax information on request, first agreed in 2009. It also notes that a number of others have refused to commit to the new standard for automatic exchange scheduled to go into effect in 2017-18.
“Our standards on tax transparency are robust,” Mr Gurría said. “They need to be effectively implemented worldwide, by everyone, with no exceptions, so there’s nowhere left to hide.”
The OECD Secretary-General’s report proposes that the G20 take additional steps to ensure that all countries and jurisdictions immediately endorse and implement all global standards devised and implemented by the Global Forum on Transparency and the Exchange of Information for Tax Purposes.
The first priority is ensuring full implementation of the existing standard on Exchange of Information on Request, in time for the G20 Leaders Summit in 2017. At present, eight jurisdictions still do not have sufficient legal and regulatory frameworks in place, and, as a result, are blocked in Phase 1 of the peer review process. A further six jurisdictions are only now being examined in Phase 2 of the review process, which assesses the actual effectiveness of information exchange on request. Twelve additional jurisdictions are rated as only being “partially compliant” at the conclusion of the Phase 2 reviews.
The OECD welcomes that 98 jurisdictions have already committed to the Common Reporting Standard (CRS) on Automatic Exchange of Information (AEOI) adopted by the G20 in 2014 and set to come into effect over the 2017-18 period, most recently Nauru and Vanuatu. However, two financial centres - Panama and Bahrain – have yet to do so.
The OECD Secretary-General urges the G20 to demand that all jurisdictions commit to AEOI and honour existing commitments to implement AEOI by the agreed timelines. It also suggests that G20 members further consider the development of defensive measures against non-compliant jurisdictions.
The OECD report says further progress is needed on the implementation of beneficial ownership identification rules. The OECD Oslo Dialogue – an inter-government effort to fight tax crime and illicit financial flows - should be mandated to devise new recommendations to strengthen effectiveness of inter-agency and cross-border co-operation.
The OECD stands ready to assist other initiatives such as the proposal released today by the Finance Ministers of the G5 (France, Germany, Italy, Spain and the UK) to develop a standard of automatic exchange of beneficial ownership information.
Please do not hesitate to contact us with any queries you may have.
4-8 Hope Street, Douglas, Isle of Man
Phone: +44 (0) 1624 610122