International Taxation: Global automatic exchange of information coming into force

By in

International Taxation: Global automatic exchange of information coming into forceTax avoidance in itself is not illegal. Tax evasion, however, is. Offshore tax evasion remains a serious problem for countries and jurisdictions worldwide, with vast amounts of funds deposited abroad and sheltered from taxation when taxpayers fail to comply with obligations in their home countries. Following the G20 request to reinforce action against tax evasion and inject greater tax transparency, the OECD has announced today a new single global standard for the automatic exchange of information between tax authorities worldwide. The OECD will formally present the standard for the endorsement of G20 finance ministers during a 22-23 February meeting in Sydney, Australia. Businesses which are using offshore companies in international tax planning have to take this fact into account. Low tax jurisdiction countries like Cyprus (a corporate tax rate is 12.5% only) might see a demand in Cyprus offshore companies as the cost of their incorporation and maintenance has dropped down due to an economic crisis in EU. Cyprus local staff and office rent cost has also dropped down which will allow to create local company at low cost in Cyprus.