G20 summit: states chase tax evaders with plan to swap data globally
09 September 2013
Posted by: Author: Simon Bowers (The Guardian)
Author: Simon Bowers (The Guardian)
World leaders attending the annual G20 summit on Thursday are expected to promise to develop powerful tools to help the authorities combat international tax evaders, with a deadline of next June.
The move at the meeting, being held in St Petersburg, Russia, will be claimed as a victory for an aggressive new strategy in the battle against evasion. The plan is to unilaterally demand that financial institutions automatically surrender information on customer assets to overseas tax authorities.
This bold approach has been pioneered by the US and has attracted accusations from tax havens of human rights abuses and economic imperialism. But the G20 nations will all sign up to the measures.
The plan is to be drafted by the OECD, and borrows heavily from the Foreign Account Tax Compliance Act drawn up in the US. This act came into force this year and requires financial firms around the world to disclose details of the assets of all American citizens held overseas or face punishing taxes on US operations.
The politicians at the G20 summit could also offer a commitment on when the rules will come into force – which is likely to be some months on to allow financial firms to prepare IT and compliance systems.
Meanwhile, the G20 heads of state are also expected to give their formal backing to an unprecedented programme of tax reform designed to curb widespread tax avoidance strategies pursued by multinational corporations.
While there is international consensus on the need for reform, many tax campaigners are concerned that national interests could derail the process as experts thrash out details of a revised blueprint for bilateral tax treaties over the next year and a half.