The OECD Secretary-General today addressed a Berlin conference on the fight against tax fraud and evasion, organised by the French and German governments. Mr. Angel Gurría said that he welcomes the progress in implementing international standards of transparency and exchange of information for tax purposes.
In his statement to the meeting, Mr. Gurria noted progress made by a number of countries and announced that the next meeting of the Global Forum on Transparency and Information Exchange, which guides the OECD’s work in this area, will take place in Mexico on 1-2 September.
The OECD’s work to combat tax evasion has received crucial support from the leaders of the G20, and earlier this month G8 Finance Ministers meeting in Lecce, Italy, asked the OECD to provide *“an update on progress on the G20 agreement to tackle tax havens”.* It is anticipated that this will be presented at the annual meeting of the OECD Council at Ministerial level, which takes place in Paris on 24-25 June.
Mr. Gurria referred to the initiative launched in October 2008 to respond to the lack of progress in implementing the OECD’s standards of transparency and exchange of information. He said, *“..over these eight months, we have made more progress than in the last 10 years. Both Minister Steinbrϋck and Minister Woerth, have made a major contribution to this progress.”* He maintained that the OECD’s work on Harmful Tax Practices has highlighted the harmful effects that result from a lack of transparency, reliance on strict bank secrecy, and lack of effective exchange of information, and that its collaboration with members and non-OECD member countries has produced a set of standards that have been nearly universally accepted.
The Secretary-General spoke to the progress in implementing the standard, highlighting for example the rapid progress made by the four OECD countries that have recently withdrawn their reservations on Article 26 (the Exchange of information article) of the OECD Model Tax Convention: *“Austria will discuss changes to its internal legislation next week which will enable it to upgrade its treaty network. Belgium, which already has a treaty with the US which meets the OECD standard, has written out to more than 80 countries proposing a protocol to existing treaties to incorporate the article 26 standard and today in Berlin signed a protocol with the Netherlands. Luxembourg now has treaties signed with Bahrain, Denmark, France, India, the Netherlands and the United States, which meet the OECD standard. Switzerland is also negotiating with a number of countries and has recently concluded its negotiations on revising its treaties with Denmark, France, Mexico, Norway and the US.”*
All 84 countries surveyed by the Global Forum have now endorsed the standards and agreed to implement them, and the number of tax information exchange agreements (TIEAs) doubled to over 80 during the last six months.
Mr. Gurria also spoke on improving voluntary compliance and the “Next Steps”. The latter included an examination of how to improve the effectiveness of defensive measures. In 1998 the OECD had identified three categories of defensive measures:
* domestic tax measures (e.g. putting withholding tax on payments to uncooperative jurisdictions);
* tax treaty measures (e.g. terminating treaties with countries that are not prepared to engage in full exchange of information); and
* non – tax measures (e.g. discouraging international financial institutions from having funds in uncooperative jurisdictions).
Delegates in Berlin were told, too, that the OECD is working together with the Financial Action Task Force (FATF) on how to establish a coherent framework between tax and FATF transparency standards.
He concluded that, *“This is a global challenge; beyond the G7, the G8, the G20, or the OECD itself. We will keep working very hard to strengthen tax transparency throughout the world, by urging all interested countries to come together to implement swiftly and effectively the global standards, to build together a stronger, cleaner and fairer global economy.”*