OECD Report on “Promoting Transparency and Exchange of Information for Tax Purposes”

OECD (The Organization for Economic Co-operation and Development) with its offices in Paris has only recently published a very interesting report with the title “Promoting Transparency and Exchange of Information for Tax Purposes”. The report was published on the 29th of January this year and contains a thorough account for the work and objectives of OECD regarding exchange of information for tax purposes.

The report also contains an account for the progress made the last years and in this part the achievements are quite extraordinary. The following is taken directly from the report (page 13).

“Up to the G20 Washington Summit on 15 November 2008 a total of 44 tax information exchange agreements (TIEAs) had been signed. Very few of the jurisdictions identified as not having substantially implemented the internationally agreed tax standard in the Progress Report issued in conjunction with the G20 Summit in London on 2 April had signed any double taxation conventions (DTCs) that met the standard. The 23 TIEAs agreed in 2008 were double the total number of agreements that had been signed since the Global Forum began in 2000. Following the G20 summit in Washington and in the run-up to the London Summit in April 2009 TIEA signings skyrocketed, as well as the negotiation of new DTCs or protocols to existing DTCs that incorporated the standard on exchange. A further 21 TIEAs/DTCs were agreed in just four months, and between the London Summit and the G20 meeting in Pittsburgh in September 164 more agreements were in place. The pace continued and by the end of the year a total of jurisdictions working to substantially implement the standard had signed 198 TIEAs and upgraded 115 DTCs.”

It is evident that life will be more difficult for those who are using offshore centers with an illegal purpose. For those who are using offshore structures in accordance with applicable laws there will probably be no difference and business will continue as usual.

The report from OECD can be downloaded in its entirety by clicking on the link down below.

OECD Report – Promoting Transparency and Exchange of Information for Tax Purposes.

Monaco’s Position as a Tax and Secrecy Haven

Monaco has since long established itself as a home for the riches. One of the means to achieve this status has been a tax system with almost no taxes in combination with strict secrecy laws. Actually only French nationals pay income tax in Monaco and these taxes are paid directly to the French Government. Other nationals pay no income tax at all in Monaco.

However, like many other low-tax jurisdictions, Monaco has been put under international pressure and last year adopted international standards for banking openness and information-sharing. This adoption includes a commitment from Monaco to abide by the standards outlined under Article 26 of the organization’s Model Tax Convention, which requires the tax authorities to exchange information on request if there is probable cause to suspect tax evasion.

The following video shows not only the extraordinary life that you can enjoy in Monaco but does also highlight some of the issues that Monaco faces following the changes that are taking place on an international level regarding the openness and information-sharing with offshore and low-tax jurisdictions.

About Offshore Financial Centers from the Economist

The interview was made some years ago but is still interesting and what is being said is still valid. Joanne Ramos, banking correspondent of the Economist, is giving her view on the development of offshore financial centers and their role in international business. You can listen to the interview down below or listen to it at the web site of the Economist.