The OECD has prepared a report for the G20 Finance Ministers and Central Bank Governors on international measures being taken to ensure that taxpayers pay the correct amount of tax. These measures include the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes; the OECD’s efforts to strengthen the automatic exchange of tax information; and the latest moves in respect of base erosion and profit shifting.
The Global Forum is now conducting Phase 2 of its peer reviews, looking at the effectiveness of information exchange practices. Following the completion of the phase 2 reviews the Forum will rate countries on their implementation of the exchange of information standards. Countries will be rated as compliant, largely compliant, partially compliant or non-compliant. Ratings are expected to have been allocated to around fifty jurisdictions by the end of 2013.
The G20 has given a mandate to the OECD to make the automatic exchange of information the new standard, and in response to this the OECD is developing a standardized, secure and effective system in relation to the automatic exchange of tax information. The Multilateral Convention on Mutual Administrative Assistance on Tax Matters is regarded by the OECD as the best vehicle for implementing the multilateral exchange of tax information. In addition to providing methods of fighting international tax evasion the Convention also protects taxpayer rights.
The report also notes that an action plan in respect of base erosion and profit shifting is to be presented to the G20 in July 2013.