More jurisdictions sign up to OECD and automatic exchange of information

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oecdWho’s in on the automatic exchange of information?
At the beginning of May this year the OECD sat down to its annual Ministerial Council Meeting in Paris, where its declaration on automatic exchange of information in tax matters was endorsed by all 34 member states including Argentina, Brazil, China, Colombia, Costa Rica, India, Indonesia, Latvia, Lithuania, Malaysia, Saudi Arabia, Singapore and South Africa. Including non-member states there are a total of 60 countries signed up to an early adoption of the program.
What is the exchange of information?
Any country that signs up to the automatic exchange of information are agreeing to share information regarding taxation with others, who have also signed up. They are agreeing to set a single global standard on exactly how this information is exchanged. The standard was developed by the OECD and authorized by the G20 finance ministers last February. It requires each country to collect and compile all financial information from its financial institutions including banks, and then to share this information in a uniformed fashion on an annual basis.
Why is an exchange of information needed?
The OECD Secretary-General Angel Gurría was quoted as saying ‘Today’s commitment by so many countries to implement the new global standard, and to do so quickly, is another major step towards ensuring that tax cheats have nowhere left to hide.’ It all comes down to tax evasion and often by some of the biggest corporations and most recognizable brands, thus the amount of sums we are talking about can be enormous. This comes out of our governments pockets and therefor our pockets, it can not only put a strain on our society’s infrastructure but can undermine our trust in a fair and honest tax system, where everybody regardless of size and amount should play and pay their part.
Time scale for implementation
The OECD plan to deliver detailed information on the new standard including solutions to the many technical problems that are sure to arise during the teething process, and information as to how it will be implemented, this should happen in the September meeting of the G20 finance ministers. For more information follow this link to the OECD website http://www.oecd.org/tax/transparency/
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