51 countries against tax evasion
October 29, 2014
Fifty-one countries agreed Wednesday to share their citizens' financial data more openly with authorities in order to combat tax evasion.
"Banking secrecy in its old form has become obsolete," German Finance Minister Wolfgang Schäuble told an international taxation conference in Berlin.
The new deal would facilitate the exchange of private information held by banks, such as customers' account balances, interest earned, dividends and sales proceeds from financial assets on an annual basis.
Banks would pass that information along to their country's tax authorities, who would in turn share it with an account holder's home country.
The new standards were developed by the Organization for Economic Cooperation and Development (OECD) in order to force notorious tax havens to disclose the names and fortunes of tax dodgers.
While the OECD does not have an estimate of how much money is stowed away in illegal offshore accounts, efforts by 20 countries to make tax avoiders come clean have gleaned 37 billion euros ($47 billion) since 2009, said the head of the OECD's center for tax policy and administration, Pascal Saint-Amans.
Signees of the new framework included all 28 European Union members, but not the United States. A dozen other states signaled their willingness to join the treaty at a later date. That included Switzerland, which has to first put the issue to a referendum.
There are already a number of bilateral agreements in place to combat tax evasion internationally.
The template for the current pact was the US Foreign Account Tax Compliance Act of 2010, which has required non-US financial institutions to share information on accounts with the International Revenue Service in Washington, DC.
The deal is not expected to go into effect until 2017, when signees have had the chance to vote on the new standards in their national parliaments.
cjc/uhe (AFP, Reuters, dpa)