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Switzerland and information exchange: tweak, tweak and something will always remain

November 28, 2016   Blog, Information Exchange

In less than a year data will start to flow under a new scheme for countries to share information automatically across borders, to help each other collect taxes from their taxpayers and fight financial crimes and abuses.  The scheme is the Common Reporting Standard (CRS) which was set up by the OECD, a club dominated by rich countries. The scheme will start to deliver global automatic exchange of information from 2017.

Switzerland seen backing down on supporting tax haven USA

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A curious love-hate financial relationship

In July we wrote a blog entitled Luxembourg backing down on supporting tax haven USA. Now it’s Switzerland’s turn.

This concerns the OECD’s Common Reporting Standard (CRS,) a global scheme to share banking information. The United States isn’t a participating jurisdiction: it has its own FATCA project, which as we’ve remarked before, is good at ferreting out US taxpayers overseas, but provides relative little information in the other direction to help other countries enforce their own tax laws. Making the United States a giant tax and secrecy haven.

OECD threatens Bahamas with blacklisting, Bahamas wilts

The Bahamas approach to transparency

The Bahamas on transparency

The Spanish newspaper El Mundo is running an article in Spanish, whose headline translates as “If Bahamas goes on like this, it will go onto the G20 blacklist” – and the text in quote marks comes from Pascal Saint-Amans, head of tax at the OECD, the club of rich countries.

The Bahamas has been in the news recently: first, we wrote a scathing blog about how the Bahamas was a big hole in global efforts to build transparency, refusing to participate effectively in the OECD’s incoming Common Reporting Standard to share banking information across border. Very soon afterwards, an article appeared in The Economist whose subheading “The Bahamas cocks a snook at the war on tax-dodgers” said it all — and it received a fusillade of angry responses from Bahamas media. Then, a few days later, a series of “BahamasLeaks” international articles appeared in the media, co-ordinated by the International Consortium of Investigative Journalists (ICIJ,) confirming Bahamas’ role as a turntable for dirty money.

The G20 and OECD tax haven blacklist proposals risk becoming another whitewash

July 22, 2016   Blog

Press Release: For immediate release, July 22, 2016

The G20 and OECD tax haven blacklist proposals risk becoming another whitewashtjnMain3616x3616

This weekend G20 Finance Ministers from the G20 countries will meet in China. One of the items on their agenda will be to agree the criteria for identifying non-cooperative jurisdictions with respect to tax transparency, which the OECD has been mandated to establish. The first details of the proposals have become public and our analysis gives rise to grave concerns that the criteria are, in the same way as past attempts at blacklists, weak and ineffective. The USA in particular is likely to escape blacklisting because of the peculiar nature of the criteria.

The three criteria the OECD has come up with for assessing non-cooperative jurisdictions are summarised below. Each country has to meet two of the three in order to escape blacklisting:

  1. If the country gets a rating of “largely compliant” or better from the OECD’s Global Forum, as regards the “exchange of information on request” standard of transparency.
  2. The country commits to adopting automatic information exchange (the so-called Common Reporting Standard, CRS), and to begin exchanges by 2018 at the latest.
  3. The country has signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MCMAA), a multilateral framework for all kinds of information exchange, or if it has what the OECD considers a sufficiently broad exchange network providing for exchange of information on request and automatic exchange of information.

Will the OECD tax haven blacklist be another whitewash?

hangzhou_logoFinance Ministers from the G20 countries meet in China on July 23-24 – this weekend. Amid sessions that will focus heavily on Brexit-related issues, there will be an important tax component. At their previous meeting they mandated the OECD to “establish objective criteria . . . to identify non-cooperative jurisdictions with respect to tax transparency.”

A blacklist, in other words.

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