Steady progress is being made towards tackling tax evasion more effectively, according to reports presented to G20 leaders at their summit in Los Cabos, Mexico yesterday.
A report by the Global Forum on Transparency and Exchange of Information for Tax Purposes says significant progress has been made since the last G20 Summit in Cannes in November 2011. In particular, the Global Forum has now launched a number of reviews to assess whether cross-border exchange of information is being implemented effectively.
A supplementary report by the OECD shows growing adherence to automatic exchange of tax information. The OECD also announced a new initiative to tackle the misuse of corporate vehicles such as shell companies. The work will tackle the issue of tax base erosion and profit shifting by some multinational firms. A progress report on the initiative will be presented to the next G20 Summit.
The Global Forum reports that more than 800 cross-border exchange of information agreements have now been signed. And since the Cannes Summit, four more countries - Colombia, Costa Rica, Greece and India - have signed a multilateral Convention to counter tax evasion. The number of signatory countries now stands at 35.
The Multilateral Convention on Mutual Administrative Assistance in Tax Matters offers a wide range of tools to facilitate cross-border tax cooperation. It includes automatic exchange of information, multilateral tax examinations and international assistance in the collection of tax due. At the same time, the Convention imposes safeguards to protect the confidentiality of the information exchanged.
The Convention reinforces cooperation to target tax evasion by both individuals and corporations. It complements the work of the Global Forum, supported by the OECD, which now includes 109 countries in extensive peer review processes. The Global Forum examines laws and regulations (Phase 1 reviews) and implementation of the international standard of transparency and exchange of information (Phase 2 reviews). The latest reviews, to be published Wednesday 20 June 2012, will include phase 2 assessments of China and Greece.
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