Stepping up efforts to curb international tax evasion, the Organisation for Economic Co-operation and Development (OECD), a global economic policy forum with 34 member government, has unveiled a new data-sharing initiative aimed at exposing the practice.
Responding to a mandate from G20 leaders to reinforce action against tax avoidance and evasion, OECD developed a new global standard for the automatic exchange of information between tax authorities worldwide.The standard calls for information from financial institutions to be automatically shared with other countries on an annual basis. The protocol details the account information to be exchanged, the financial institutions that need to report, the different types of accounts and taxpayers covered, and common due diligence procedures to be followed by financial institutions.
The initiative is intended to build upon efforts within the European Union, a global focus on global anti-money laundering standards, and the U.S, Foreign Account Tax Compliance Act (FATCA), a similar push for sharing tax information. It will be submitted to G20 finance ministers for approval at a Feb. 22 meeting in Sydney, Australia.
More than 40 countries have already committed to its early adoption of the standard. The Global Forum on Transparency and Exchange of Information for Tax Purposes, hosted by the OECD, has been mandated by the G20 to monitor and review its implementation