On 9 March 2018 the OECD has issued model disclosure rules requiring lawyers, accountants, financial advisors, banks and other service providers to inform tax authorities of any schemes they set up for their clients to avoid reporting requirements under the OECD/G20 Common Reporting Standard (CRS), or to prevent the identification of beneficial owners of entities or trusts.
Some taxpayers attempt to hide offshore assets and avoid reporting requirements under the CRS, with the help of advisors and financial intermediaries. The rules released by the OECD are aimed at these taxpayers and their advisers. The rules introduce a requirement for intermediaries to disclose schemes set up to avoid CRS reporting to the tax authorities. The rules also require the reporting of structures set up to avoid revealing the beneficial owners of offshore assets, companies and trusts.
The mandatory disclosure rules are a tool for detecting taxpayers that do not comply with their obligations to declare their assets and income to their tax authorities. The rules also aim to deter the design, marketing and use of schemes to avoid CRS reporting or to hide beneficial owners by using opaque offshore structures.
The model disclosure rules are to be submitted to the G7 presidency in due course. They represent a part of a wider strategy by the OECD to monitor and combat attempts to avoid CRS reporting and hide assets offshore.
