Some 10 years since the G20 declared the end of banking secrecy, OECD’s Global Forum said it has achieved “unprecedented success” in using new transparency standards to fight offshore tax evasion.
Working through the Global Forum, 158 member jurisdictions have implemented “robust standards” that have prompted a tidal shift in exchange of information for tax purposes.
At the heart of this shift are thousands of bilateral exchange relationships now in place, which have enabled more than 250 000 information exchange requests over the past decade.
According to data in the Global Forum’s 10th anniversary report, in 2018 nearly 100 member jurisdictions automatically exchanged information on 47 million financial accounts, covering total assets of $4.9trn (£3.7trn). In total, more than €100bn (£85bn) in additional tax revenue has been identified since 2009.
In addition, the OECD said that a recent study shows that wider exchange of information driven by the Global Forum is associated with a global reduction in foreign-owned bank deposits in international financial centres (IFC) by 24% or $410bn (£317bn) between 2008 and 2019.
The commencement of AEOI in 2017 and 2018 is associated with an average reduction in IFC bank deposits owned by non-IFC residents of 22%.
OECD secretary-general Angel Gurría, said: “The Global Forum has been a game-changer. Thanks to international co‑operation, tax authorities now have access to a huge trove of information that was previously beyond reach.
“Tax authorities are talking to each other and taxpayers are starting to understand that there’s nowhere left to hide. The benefits to the tax system’s fairness are enormous.”
Almost all Global Forum members have eliminated bank secrecy for tax purposes, with nearly 70 jurisdictions changing their laws since 2009. Almost all members either forbid bearer shares– previously a longstanding impediment to tax compliance efforts – or ensure that the owners can be identified.
Since 2017, members must also ensure transparency of the beneficial owners of legal entities, so these cannot be used to conceal ownership and evade tax.