UK and International Tax news
OECD Update On Global Tax Transparency Initiatives
Wednesday 12th June 2019
The OECD has issued an update on the status of global tax transparency initiatives including the Common Reporting Standard and Automatic Exchange of Information for tax purposes.
The OECD has confirmed that over 90 jurisdictions participating in the Common Reporting Standard since 2018 have now exchanged information on 47m offshore accounts, with a total value of around EUR 4.9tn.
The Automatic Exchange of Information (AEOI) initiative, activated through 4,500 bilateral relationships, marks the largest exchange of tax information in history, as well as the culmination of more than two decades of international efforts to counter tax evasion.
Voluntary disclosure of offshore accounts, financial assets and income in the run-up to full implementation of the AEOI initiative has resulted in more than EUR 95bn in additional revenue (tax, interest and penalties) for OECD and G20 countries over the 2009-2019 period. This cumulative amount is up by EUR 2bn since the last reporting by OECD in November 2018.
Preliminary OECD analysis drawing on methodology used in previous studies shows the very substantial impact AEOI is having on bank deposits in international financial centres (IFCs).
Deposits held by companies or individuals in more than 40 key IFCs increased substantially over the 2000 to 2008 period, reaching a peak of USD 1.6tn by mid-2008. These deposits have since fallen by 34% over the past ten years, representing a decline of USD 551bn, as countries adhered to tighter transparency standards. A large part of that decline is due to the onset of the AEOI initiative, which accounts for about two thirds of the decrease. Specifically, AEOI has led to a decline of 20% to 25% in the bank deposits in IFCs, according to preliminary data. The complete study is expected to be published later this year.
If you would like further detail on the above, please contact Keith Rushen on 0207 486 2378.