Rise in countries sharing tax info
Print Edition
SWITZERLAND and Singapore have joined the growing ranks of countries agreeing to share tax information in a major breakthrough against banking secrecy, the OECD said.
Under the pledge signed by 47 countries, financial data will automatically be shared annually between governments, including taxpayers’ bank balances, dividends, interest income and sales proceeds used to calculate capital gains tax.
“It’s clearly the end of bank secrecy abused for tax purposes,” Pascal Saint-Amans, tax director at the Organization for Economic Cooperation and Development, said at a meeting held by the international think-tank in Paris.
“It means that governments can really assess the tax owed by people who thought they could hide in other jurisdictions.”
While most of the signatories had already committed to sharing tax information automatically, the fact that Switzerland and Singapore have now also signed up is a big step in a fight against tax evasion that governments have intensified since the global financial crisis.
Facing mounting pressure to dismantle a cherished culture of banking secrecy, some of Switzerland’s 300-plus private banks had already signaled last year their readiness to work with US officials to crack down on wealthy Americans.
Switzerland is still the world’s biggest offshore financial center with US$2 trillion in assets. But Singapore is breathing down its neck and a 2013 study showed finance professionals see it soon overtaking the Alpine nation amid a global tax crackdown and tighter regulation.
The OECD has devised a common standard to ease the exchange of financial details, which its 34 members and the 13 other countries will adopt.
Financial companies will also have to identify the ultimate beneficiaries of shell companies, trusts and similar legal arrangements that at present can be used to evade taxes.
Although the signatories did not officially commit to a specific deadline, some early adopters aim to have data exchange up and running by 2017.
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