Automatic exchange
of information on a global scale will become a reality in 2017, as 51 countries
signed an agreement to share financial information. Another 35 jurisdictions
will join the following year.
All Organisation
for Economic Cooperation and Development (OECD) and G20 countries, as well as
most major international financial centres, signed a “multilateral competent
authority agreement” that will activate the automatic sharing of financial data
for tax purposes. The signing ceremony took place at the Global Forum on
Transparency and Exchange of Information for Tax Purposes in Berlin on 29th
October.
It shows the
determination from governments across the globe to prevent tax evasion and
capture lost tax revenue. Tax authorities of participating countries will be
able to gather much more information on the assets their taxpayers hold abroad.
The OECD explains
that automatic exchange of information “can provide timely information on
non-compliance where tax has been evaded either on an investment return or the
underlying capital sum, even where the tax administrations have had no previous
indications of non-compliance”.
58 jurisdictions,
known as the “early adopters”, have pledged to make the first exchange in 2017.
This includes Spain, the UK, Spain, Germany, most of the EU, Isle of Man,
Jersey, Guernsey, Gibraltar, Bermuda, Cayman Islands, British Virgin Islands,
Iceland, Liechtenstein, San Marino, Seychelles, Argentina and South Africa.
A further 35
jurisdictions have said they will start in 2018. This includes Hong Kong,
Monaco, Singapore, United Arab Emirates and, significantly, Switzerland.
Although not one of
the early adopters, the Swiss government has adopted mandates to soon begin
negotiations with the EU and other countries on automatically sharing data on
bank accounts from 2018.
