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G20 adopts convention to tackle evasion

08 November 2011
Issue: 4329 / Categories: News , Admin
Agreement empowers cross-border tax cooperation

Every government in the G20 has signed up to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which offers a broad range of tools for cross-border tax cooperation.

It includes automatic exchange of information, multilateral simultaneous tax examinations and international assistance in the collection of tax due, and it imposes safeguards to protect the confidentiality of the data exchanged.

In 2009, the G20 called for action to allow developing countries to secure the benefits of the new cooperative tax environment.

In response, the Organisation for Economic Co-operation and Development (OECD) and the Council of Europe developed a protocol to amend the multilateral convention and bring it in line with the international standard on exchange of information and open it up to countries that are members of neither the OECD nor of the Council of Europe.

The instrument reinforces international cooperation to target tax evasion by both individuals and corporations. It complements other initiatives such as that of the global forum on transparency and exchange of information for tax purposes, supported by the OECD, which already includes 105 countries in an extensive peer review process.

The anti-poverty charity ActionAid criticised the new convention, saying there is ‘no evidence [developing countries] have benefitted at all, or will benefit from what is proposed’.

However, the organisation acknowledged that the fact that ‘the communiqué encourages progress towards to the automatic exchange of tax information, which would be a big step forward from current practice’.

Issue: 4329 / Categories: News , Admin
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