Tackling tax abuse

Though OECD work on making international tax fairer began over 50 years ago, it was not until 1998 and a report on harmful tax competition that the OECD stepped up its work against tax evasion, tax havens and abuse.

Since then it has been committed to counter harmful tax practices and improve compliance, encourage exchange of information, combat aggressive tax planning and corruption, and improve co-operation between tax and anti-money laundering authorities.

The 1998 report defined a tax haven as a country or territory where there is no or nominal tax on the relevant income, combined with a lack of effective exchange of information, a lack of transparency, and no substantial economic activities. The OECD has also developed standards of transparency and exchange of information that have been endorsed by governments and international organisations throughout the world and which serve as a model for most of the 3,000 bilateral tax conventions in existence today.

The standards require several things, such as exchange of information on request where it is "foreseeably relevant" to the administration and enforcement of the domestic laws of the treaty partner, and respect for taxpayers' rights. Strict confidentiality of all information exchanged is also required. Progress on improving transparency, informationsharing and compliance with tax laws accelerated in the lead-up and aftermath of the G20 summit in April 2009, which set the fight against tax havens as a priority.

All 30 OECD countries now meet the standard. Of the 40-plus tax havens that the OECD identified in 2000, nine-the Netherlands Antilles, Aruba, Bermuda, the British Virgin Islands, Cyprus, the Isle of Man, Guernsey, Jersey and Malta-are actively implementing the OECD standard either by means of Tax Information Exchange Agreements (TIEAs) or tax treaties, and the international community needs to recognise this progress. Macao and Singapore, as well as Hong Kong, China, have endorsed the standards and will take steps before the end of 2009 to start implementing them. Andorra, Liechtenstein and Monaco have also agreed to implement the standards. The Global Forum on Taxation, which is now the pre-eminent platform for international dialogue on this issue, will monitor commitments and push for compliance in more jurisdictions, as well as work to prevent the creation of new tax havens.

References

OECD (1998), Harmful Tax Competition: An Emerging Global Issue, Paris For more details, see also www.oecd.org/tax/evasion

Visit www.oecd.org/tax

Visit www.oecd.org/finance

©OECD Observer No 273 June 2009



Bookmark this


Economic data

E-Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Editor's choice

  • Transports in Asia. The Asian Development Bank advocates sustainable transport in a continent where vehicle ownership is perceived as a sign of social success.
  • Vote for your favourite photograph! This World Bank #EachDayISee photo contest aims to display visual stories from all over the world through which people express what they would like to see changed and improved.
  • Why is investment so low in the euro area? This short IMF blog post gives you an insight into the causes of the euro-zone's drastic decline in investment.
  • Have your say! The UN wants to know what matters most to you: pick six global issues in the list and send it to the United Nations.
  • Clear air and healthy lungs: how to better tackle air pollution. From New Delhi to Accra, millions of people breathe polluted air. A new report examines the World Bank’s experience working to improve air quality.
  • The boring secret of great cities. Plenty of things make a city great but what really makes a difference originates in the structure of municipal government according to the OECD's report "The Metropolitan Century".
  • Guinea gets $37.7 million in extra IMF financing to help combat Ebola
  • Towards an international carbon pricing framework? Designing a unified international carbon pricing system could help to move towards a fully functional low-carbon global economy.
  • Putting the global economy on a more virtuous path. Current potential growth rates are well below pre-crisis levels. To avoid stagnation, governments have to put in place robust structural reforms.
  • World Water Day: 22 March 2015 For World Water Day, UN-Water identifies upcoming challenges and sets the theme for the years to come. In 2015, the theme for World Water Day is Water and Sustainable Development.
  • What drives street-based child labour?The ILO, UNICEF, Save the Children and the Lebanese Ministry of Labour launch a first-ever study assessing the scope and characteristics of the increasingly visible phenomenon of one of the worst forms of child labour.
  • No “Grexit”. Speaking to CNBC, OECD Secretary-General Angel Gurría says he would do everything to make sure Greece does not leave the euro. "Everybody wants Greece to stay in, everybody wants Greece to prosper and to get out of its short-term morass," he told CNBC. Watch the video.
  • engaging citizens
  • Interested in citizen engagement? The World Bank Group offers a four-week online course which aims to teach how citizens can engage in both policymaking and public service delivery.
  • 2.1 million jobs could be created in Europe by 2018 under the three-year investment plan put forward by European Commission President Jean-Claude Juncker, according to the ILO.
  • Become involved in urban flood risk management. This World Bank two-week online forum gives you the opportunity to discuss how to preserve cities from these natural disasters with experts and development leaders.
  • Promoting decent work for migrant workers.This ILO report highlights the need to ensure decent work for migrants, which is part of the global agenda on sustainable development.
  • Composite leading indicators

Most Popular Articles

Subscribe Now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly


Online edition
Previous editions

Poll

What issue are you most concerned about in 2015?

Euro crisis
Unemployment
Global warming
International conflict
Other

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2015