As published on internationalinvestment.net, Monday December 2, 2019.
Global action by OECD countries to reduce tax evasion has resulted in a 24% global reduction in foreign-owned bank deposits held in international financial centres (IFC).
The Global Forum on Transparency and Exchange of Information for Tax Purposes convened in Paris to discuss international efforts to advance tax transparency.
"Ten years since the G20 declared the end of banking secrecy, the international community has achieved unprecedented success in using new transparency standards to fight offshore tax evasion," the OECD said in a statement ahead of the plenary meeting.
"Tax authorities are talking to each other and taxpayers are starting to understand that there’s nowhere left to hide"
Comprising 158 member jurisdictions, the Global Forum is an OECD initiative that works to address the risks to tax compliance posed by non-cooperative jurisdictions.
The shift is credited to the thousands of bilateral exchange relationships now in place, which have enabled more than 250,000 information exchange requests over the past decade.
The exchange of information on request alone had enabled the recovery of nearly €7.5bn of additional tax revenue. Foreign-owned bank deposits in international financial centres are today 22% lower - or about $410bn - compared to 2008. And €100bn in additional tax revenue has been identified since 2009.
"Thanks to international cooperation, tax authorities now have access to a huge trove of information that was previously beyond reach," said OECD Secretary-General Angel Gurría. "Tax authorities are talking to each other and taxpayers are starting to understand that there's nowhere left to hide. The benefits to the tax system's fairness are enormous."
Almost all global forum members have eliminated bank secrecy for tax purposes, with nearly 70 jurisdictions changing their laws since 2009. Almost all members either ban bearer shares - previously a longstanding impediment to tax compliance efforts - or ensure that the owners can be identified.
According to the Global Forum's 10th anniversary report, 2018 saw nearly 90 member jurisdictions automatically exchange information on 47 million financial accounts, covering total assets of $4.9trn.
To improve the uptake of automatic exchange of financial information in developing countries, the OECD-UNDP Tax Inspectors Without Borders Initiative launched a pilot project this week aimed at supporting the effective use of the data.
"There is still a lot of work ahead of us," said Zayda Manatta, head of the Global Forum Secretariat.