OECD reports ‘major progress’ on fairer international tax system
The OECD is claiming major progress towards the goal of creating a fairer international tax system, with countries collaborating to close down loopholes, improve transparency and ensure that multinational enterprises pay tax where they carry out their activities, according to its latest report to G20 leaders
6 Jul 2017
The report highlights progress in each of the areas where OECD has been mandated to boost international co-operation on tax issues.
According to the update, the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum) now has 142 member countries and jurisdictions, and the OECD reports that ‘the last 12 months has seen major improvements on the tax transparency front’.
The OECD says over 60 jurisdictions will have activated close to 2,000 bilateral relationships for the automatic exchange of common reporting standard (CRS) information, including all 50 jurisdictions committed to undertaking first exchanges in 2017. As a result of this initiative 500,000 people have disclosed offshore assets, and around €85bn (£74.6bn) in additional tax revenue has been identified as a result of voluntary compliance mechanisms and offshore investigations.
Whereas five financial centres had still not done so in April 2016, all requested jurisdictions have now committed to the automatic exchange of information (AEOI), starting at the latest in September 2018. Currently, 101 jurisdictions are committed to automatically exchange all financial account information under the CRS, with all interested partners meeting confidentiality safeguards.
The OECD says more than 80% of those committed jurisdictions have already put in place both the domestic and international legal frameworks required to deliver on the commitments made, and financial institutions are already collecting the information to be exchanged.
Implementation also continues on measures to reduce tax avoidance by multinational enterprises under the G20/OECD Base Erosion and Profit Shifting (BEPS) project, with 101 countries and jurisdictions working to set standards and monitor implementation via the inclusive framework on BEPS. The OECD has established a peer review process to assess implementation of the BEPS minimum standards and work continues on pending issues including transfer pricing
The OECD also reports that countries are considering measures to enhance tax certainty, as well as progressing discussions on the complex issues around taxation of the digital economy. An interim report on taxation of the digital economy will be delivered by the OECD/G20 inclusive framework on BEPS in early 2018, followed by a final report in 2020.
OECD secretary-general Angel Gurría said: ‘Tax issues have been a key priority of the G20 since its inception, and 2017 is the year of implementation. In the midst of the backlash against globalisation, we need to deliver on an agenda of inclusive growth.
‘The work of the G20 and the OECD to repair and improve the international tax system so everyone pays their fair share remains one of the most important responses to these challenges, as well as one which is having a concrete impact.’
OECD secretary-general report to G20 leaders, July 2017 is here.