Global tax evasion crack down progresses

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.

TOPICS: Legal, Apple, Google

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

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • Looks like governments are running out of other peoples money

    • Dont fool yourself

      Not at all. They have known where it was all this time. It just that you money was better than their money.
  • Apple Inc.

    Apple Inc. is the biggest offender of tax evasion. Apple's $250,000,000,000 in their bank is undeniable proof they are evading taxes in one way or another. Apple must have some pretty good lawyers if they are evading their taxes this well.
    Pollo Pazzo
    • The big news story is coming

      The IRS I bet at this very moment has a huge investigation ongoing into Apple, gathering evidence and witness testimony about Apple's monumental tax evasion scheme.
      Pollo Pazzo
      • Sorry to rain on your parade, Crazy Chicken

        Facts are:
        1. as per Q1 2014 report, Apple holds 156 billion in cash, about $18 billion of it domestically, and not 250 billion as you claim
        2. In 2013, a bipartisan Senate probe analyzed Apples tax avoidance system and found it completely legal, albeit morally questionable.
        3. Also in the same investigation it was highlighted that essentially ALL internationally operating companies use the same approach, including Google and Microsoft
        • Nope, you're wrong

          1. ZDNet actually stated apple has $250 billion in their bank.
          2. Apple likely paid the bi partisan Committee off millions to say its not illegal what they are doing, if you don't believe that, you are very naïve.
          3. Apple is the best of all the tax evaders.
          Pollo Pazzo
  • Willingness To Pay Income Tax

    If People overall had the sense or perception that Gov'ts spend the proceeds responsibly, they'd pay taxes more readily.
    But when the take is that the money is squandered, seen as poor value for tax dollars invested then sinking into a bottomless pit, deliberate tax evasion schemes will be more common yet.
    • Hear! Hear!

      I pay a good bit in taxes. I don't mind paying taxes, they are the cost of civilization. I do however regret the way our government spends the taxes they collect. They cut back on the military and increase social charities. I am not for war but protecting our country is the number one responsibility of the government. I have looked but can't find anything in the Constitution concerning social charities. Those in power use the taxes we pay on handout programs to buy votes and get re-elected.