OECD calls on G20 finance ministers to increase international tax cooperation and transparencyJuly 29, 2013
On 20 July 2013, complementing its Action Plan on Base Erosion and Profit Shifting by companies, the OECD provided the G20 finance ministers with a proposal to increase international tax cooperation and transparency through the promotion of automatic exchange of information among jurisdictions.
The new single global standard is expected to be endorsed by the G20, which will call on all jurisdictions to commit to its implementation.
The new standard includes the following three strategic initiatives by the OECD and should be operational in 2014.
A definition of the financial information to be exchanged automatically
The definition of the financial information to be exchanged automatically will include:
- Account balance and income from certain insurance products
- Sales proceeds from financial assets
- Other income generated by assets or from payments made with respect to the account
The development of an operational platform
The OECD points out that, for automatic exchange of information to function effectively, the right legal and administrative framework needs to be in place to ensure confidentiality and to avoid misuse of the data transmitted.
Thus, common reporting and due diligence rules, supported by compatible technology and software, will be developed in the coming months.
The establishment of a multilateral legal platform
The multilateral Convention on Mutual Administrative Assistance in Tax Matters contains strict rules on confidentiality and proper use of information.
More than 70 jurisdictions, including all G20 countries, have signed the convention so far.
Building on this, the report calls on the G20 to support the development of a standardized agreement to allow signatories of the multinational convention to opt into automatic exchange of information.
Developing such a model agreement could be completed by the end of 2013, with detailed guidance available in the first half of 2014.
Work is already under way to ensure that all countries benefit from a more transparent tax environment.
This includes, for instance, helping developing countries identify needs for technical assistance and capacity building.
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