Global tax evasion crack down progresses

Summary:Members of the Organisation for Economic Co-operation and Development, including Australia, have signed a signatory that will allow them to collect information on all bank accounts and exchange it with out participating countries.

Forty-seven countries have signed up to automatically share bank data, including key financial centres Singapore and Switzerland, in what has been touted as a major step towards cracking down on global tax evasion.

Under the declaration, the 47 countries on Tuesday committed to "swiftly" pass new domestic laws that will allow them to collect information on all bank accounts and automatically exchange it with other participating countries.

They must also call on their financial centres "to implement the new single global standard without delay".

The list of signatories includes all 34 members of the Organisation for Economic Co-operation and Development (OECD), a club of developed nations that spearheaded the initiative.

That includes Australia, Switzerland, Liechtenstein, and the British jurisdictions of Jersey and Guernsey - all which have been criticised for high levels of banking secrecy in the past, laying them open to accusations that they serve as havens for tax evaders.

The list also includes Luxembourg, even though it is blocking transparency initiatives within the European Union.

The OECD has also secured the participation of 18 non-OECD nations, including the key international financial centre of Singapore.

The new global standard was described as "a real game-changer" by OECD chief Angel Gurria when it was unveiled in February.

Previously, countries would have to request data on suspected tax cheats using a process that was often complicated and some countries were uncooperative.

The United States was the catalyst for the change with its so-called FATCA law, which requires international banks to provide data on accounts held abroad by its citizens and companies or face sanctions.

Multi-national corporations, such as Google and Apple, have been suspected in the past by the Australian government to be potential offenders of what is known as the so-called "Double Irish Dutch Sandwich" method of funnelling money through other countries from Australia in order to pay a lower tax rate.

Just last week, Google Australia announced it clocked up an extra AU$7.1 million in tax during the 2013 financial year. At the same time, payments to Google's American headquarters increased by almost 80 percent during the year.

Topics: Legal, Apple, Google

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