Sydney, 24/02/2014 (Agence Europe) - In Sydney on 23 February 2014, G20 finance ministers endorsed the new automatic exchange of bank information (AEI) rules drawn up by the Organisation for Economic Cooperation and Development (OECD).
OECD Secretary General Angel Gurria said the new standard was “a real game-changer” that would boost international cooperation on tax matters, putting governments on an equal footing when it comes to protecting the integrity of their tax systems and tackling tax evasion. The new standard will increase transparency and reduce opportunities for tax evasion, commented Australian Finance Minister Joe Hockey. Welcoming the G20's endorsement, EU Taxation Commissioner Algirdas Semeta said that the EU was at the cutting-edge when it came to clamping down on tax evasion, adding: “Today is another boost for transparency and fairness in global taxation. Our focus has been on a standard that can be smoothly and effectively implemented, with minimum disruption for our businesses”.
The tax offices of countries signing up to the OECD rules will be able to obtain information about taxpayers registered in their country from banks abroad through annual AEI with other countries. The standard details the various institutions that have to comply, along with the types of tax-payers and accounts covered (see EUROPE 11018). By September, the OECD will formulate technical solutions for the exchange of information and banks will receive software for supplying the data, stated the OECD's director of policy and tax administration, Pascal Saint-Amans.
It is hoped that it will be possible to apply the new standard at the end of 2015. So far, 42 countries are planning to participate. In a press release, the G20 summit called for speedy introduction of the new rule by tax offices.
French Economy Minister Pierre Moscovici said that France would be ready to sign the agreement in the next few weeks or months and hoped the deal would be signed speedily by the G5 (Germany, France, Italy, Spain and the United Kingdom) and discussed at a meeting of European finance ministers in Paris over the next few weeks or months.
The G20 is prepared to apply pressure on jurisdictions that lag behind when it comes to relaying financial information. Moscovici said 14 jurisdictions did not yet meet the minimum tax information requirements.
Reports on taxing the digital economy
Saint-Amans said the G20 was working on standard tax rules stipulating the country in which multinationals have to pay tax, and the G20 is urging the OECD to step up its work on the question of transferring profits overseas. He pointed out that a number of countries have relocated to what the OECD views as tax havens - jurisdictions where no tax is levied, and the problem is that this is perfectly legal. He said that, if people did not like this, then they had to change the rules to make it illegal.
The OECD is working on model legislation on where companies are to be taxed, which will be unveiled at the G20 Finance Summit in Cairns, Australia, in September. The G20 says profits should be taxed where the business that generated those profits took place and where the value-added was created, and Moscovici said that the idea of territory was very important.
In September, the OECD will publish a report on adjusting taxation to fit the digital economy. Saint-Amans said that the political message was that all the loopholes are going to be closed down. Moscovici said that advances in the digital economy meant that the EU's tax rules had to change. The EU has set up a special working group on the subject. (CG/transl.fl)