UK and International Tax news
G20 Summit Declaration And OECD SG Report
Friday 13th September 2013
At their Summit in St Petersburg on 5-6 September 2013, the G20 leaders issued a declaration endorsing the OECD’s action plan on BEPS and supporting the work on presenting a new global standard for the automatic exchange of information at the next meeting of G20 Finance Ministers in February 2014.
The OECD presented a detailed report to the G20 covering the latest work by the Global Forum on Transparency and Exchange of Information for Tax Purposes, more detail on the BEPS project and on the development of a global model for automatic exchange of information.
The report provides an update on the Global Forum’s activities since June 2012 and confirms that 113 peer review reports [Phase I reviews on the laws of jurisdictions] covering 98 jurisdictions have been completed with over 650 recommendations for improvement, of which more than 400 were being acted upon. With the focus moving to the review of practice , so called Phase 2 reviews have been completed for 41 Global Forum members.
The number of jurisdictions that have committed to implement the standard on information exchange and have joined the Global Forum has grown to 119 and more than 1100 new exchange of information relationships to the standard have been put in place. These results show that the Global Forum’s work is leading to greatly improved transparency, wider exchange of information networks, and upgraded legal frameworks.
The OECD’s latest report, prepared under the authority of the OECD Secretary General, sets out the key success factors for an effective model for automatic exchange, provides relevant background and outlines four concrete steps needed to put such a model into practice:
(i) enacting broad framework legislation to facilitate the expansion of a country’s network of partner jurisdictions,
(ii) selecting or, where necessary, entering into a legal basis for the exchange of information,
(iii) adapting the scope of reporting and due diligence requirements and coordinating guidance, and
(iv) developing common or compatible IT standards.
The report also provides potential timeframes for each of the action items.
The report recognises that offshore tax evasion is a global issue requiring global solutions, otherwise the issue is simply relocated, rather than resolved. With more and more jurisdictions joining the Convention on Mutual Administrative Assistance in Tax Matters, there is a clearer legal basis for comprehensive automatic exchange with strict safeguards protecting confidentiality.
Bilateral tax treaties also provide such a legal basis and within the EU, Directives provide a specific legal framework for automatic exchange of information regarding interest income and certain other types of income between its members.
The OECD report notes that a global solution also means a global standard to minimise costs for businesses and governments, while at the same time enhancing effectiveness, maintaining confidence in open markets and best serving society at large, rather than a proliferation of inconsistent models.Contact Us