The Organisation for Economic Co-operation and Development (OECD) has presented a report to the leaders of the G8 countries, which sets out a four-pronged strategy for tackling global tax evasion.
OECD has said it was asked to present the report to the G8 following the "endorsement" by G20 finance ministers of automatic exchange of information for tax purposes becoming "the new standard".
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The four steps suggested by the OECD to tackle tax evasion include:
– Enacting broad framework legislation to facilitate the expansion of a country’s network of partner jurisdictions
– Selecting the legal basis for the exchange of information
– Adapting the scope of reporting and due diligence requirements and coordinating guidance
– Developing common or compatible IT standards
OECD said: "As the world becomes increasingly globalised it is becoming easier for all taxpayers to make, hold and manage investments through foreign financial institutions, something that not long ago was accessible only to a select few.
"Offshore tax evasion is a serious problem for jurisdictions all over the world, OECD and non?OECD, small and large, developing and developed. Cooperation between tax administrations is critical in the fight against tax evasion and a key aspect of that cooperation is exchange of information."
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataOECD added, "More and more jurisdictions are joining the convention on mutual administrative assistance in tax matters, which underlines the role of the OECD’s global forum on transparency and exchange of information for tax purposes, which is mandated by the G20 to monitor implementation of the new standard,"
G8 commitments
According to the G8, it supports the OECD’s work to tackle base erosion and profit shifting.
The G8 is committed to establish the automatic exchange of information between tax authorities as the new global standard, and will work with the OECD to develop rapidly a multilateral model which will make it easier for governments to find and punish tax evaders.
The G8 also plans to support developing countries to collect the taxes owed them, with access to the global tax information they need.
Tax talks in place
On 19 June, leaders of the major G8 economies agreed to a deal with new measures to clamp down on money launderers, illegal tax evaders and corporate tax avoiders, following British prime minister David Cameron’s letter to the leaders of Britain’s offshore tax havens emphasising on the need to "get our own houses in order" before the G8 Summit.
Earlier in June, the European Commission added new requirements to tax disclosure rules.
