The Organisation for Economic Co-operation and Development (OECD)’s meeting this week in Paris was told that global cooperation to share information, particularly regarding offshore banking, could reduce tax evasion and bring in £62bn in extra tax revenue.
It was claimed that a survey by the OECD, of 20 countries, showed that recent steps to detect and deter tax evasion had resulted in extra tax being paid of US$ 14bn, by approximately 100,000 people; with hidden assets worth around US$120-150bn. The OECD said: “That is just the tip of the iceberg. There is probably $1tn in assets held offshore.”
All G20 governments agreed to a multilateral convention to tackle tax evasion. Previously only 7 of the G20 countries, including the UK, had signed up to the agreement to provide “mutual administrative assistance” in tax matters. The new concordat includes automatic exchange of information on request, multi-jurisdictional simultaneous tax inspections, and cross border co-operation in the collection of tax.
Since 2009 700 separate “mutual administrative assistance” agreements have been signed. Countries have changed laws to allow access to previously secret information, including in relation to banks. The G20 now expect many other countries to sign the convention.
The OECD’s secretary general said: “We have taken a major step forward to improve global tax cooperation”.
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