Governments would automatically share information on taxpayers’ offshore bank and brokerage accounts with foreign tax authorities, under a draft agreement published yesterday by the OECD.
At the request of the group of 20 biggest economic powers, the organisation devised the automatic exchange of financial information so that tax evaders would have no room to hide when they stashed cash in foreign accounts.
So far, 42 countries have indicated they want to use the standard for reporting financial information to foreign governments, the OECD’s tax policy director, Pascal Saint-Amans, told reporters. Among them are Britain, France, Germany and Italy.
The Swiss government said it would take a position on using the standard when it became a global norm.
Other countries will have to decide whether to sign up in the months before a G20 summit in November in Brisbane, Australia, he said.
The European Union has estimated governments lose hundreds of billions of dollars to tax evasion each year. Much of the money is thought to be stashed abroad in undeclared offshore accounts.
Under the blueprint, banks, brokers and some insurers and investment funds would have to report residents’ account balances as well as interest, dividends and other investment income to their government. The government would then make that information available automatically to any other government that had signed the information exchanging agreement.
“You collect the data, you put it in the pipe and it goes to the other party,” Mr Saint-Amans said.
Financial companies would also be required to identify the ultimate beneficiaries of shell companies, trusts and similar legal arrangements used to evade taxes.