Automatic Exchange of Information in Tax Matters is coming into force

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taxOECD called on all jurisdictions to move towards automatic exchange of information
Due to globalization and the liberalization of economic activity the private sector has been turned into a world without borders. This creates a major problem for national tax authorities because similar changes in their enforcement powers aren’t keeping pace with the industry. National tax authorities continue to be constrained by national borders and collecting tax revenue has been difficult. Additionally, bank secrecy and other confidentiality laws in many jurisdictions (for example, tax havens) prevent disclosure of relevant information by financial institutions to government authorities. In May 2013 the OECD called on all jurisdictions to move towards automatic exchange of information and to ‘improve the availability, the quality and the accuracy of information on beneficial ownership, in order to effectively act against tax fraud and evasion.’ Also in May, the EU Council agreed to give priority to efforts aimed at extending automatic exchange of information at the EU and global level. They also welcomed the on-going efforts made by the G8, G20 and OECD to develop a global standard. At a meeting in St Petersburg in September 2013, the G20 announced that they expected to begin automatic exchange of information by the end of 2015.
Declaration on Automatic Exchange of Information in Tax Matters was endorsed
34 member countries, along with Argentina, Brazil, China, Colombia, Costa Rica, India, Indonesia, Latvia, Lithuania, Malaysia, Saudi Arabia, Singapore and South Africa endorsed the Declaration on Automatic Exchange of Information in Tax Matters, during the OECD’s annual Ministerial Council Meeting in Paris on May 2014. The Declaration commits countries to implement a new single global standard on automatic exchange of information. This standard obliges countries and jurisdictions to obtain all financial information from their financial institutions, and exchange that information automatically with other jurisdictions on an annual basis. ‘Tax fraud and tax evasion are not victimless crimes: they deprive governments of revenues needed to restore growth and jeopardize citizens’ trust in the fairness and integrity of the tax system,’ OECD Secretary-General Angel Gurría said. ‘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.’ The Global Forum on Transparency and Exchange of Information for Tax Purposes will monitor and review implementation of the standard. More than 60 countries and jurisdictions have agreed to adopt the standard, and additional Global Forum members are expected to join this group in the coming months.