G20 Summit Fights International Tax Evasion

November 4, 2011 International Tax Cooperation

G20 Tax ConventionThe recent G20 Summit saw a focus on combating international tax evasion, with marked progress made in international cooperation on the issue.

The fight against tax evasion was an important topic at the G20 Summit held in Cannes on November 3rd, with all participating countries pledging their support to the OECD’s Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which was signed by Argentina, Australia, Brazil, Canada, China, Germany, India, Indonesia, Japan, the Russian Federation, Saudi Arabia, South Africa and Turkey.

The Convention was jointly developed by the OECD and the Council of Europe with the aim of implementing a comprehensive set of rules to aid in the fight against tax evasion. According to conditions outlined in the Convention, participating countries will have improved protocols for tax information exchange, simultaneous international tax audits, and assistance in cross border tax recovery efforts.

Commenting on the signings of the new Convention, the OECD Secretary-General Angel Gurría said that the participating countries have taken a major step forward to improve global tax cooperation. The Director of the OECD Center for Tax Policy Jeffrey Owens also commended all of the signing nations saying that they are leading the world by example. He added that over coming months the OECD would be implementing further initiatives to help developing countries prepare the tax infrastructures needed to join the Convention.

According to OECD estimates, participation in the Convention could net G20 nations an additional USD 100 billion in extra tax revenues. Jeffrey Owens said that the tax revenue could grow further, and that there could be approximately USD 1 trillion more in assets and funds currently being held in offshore centers.

Photo by ThePatRyanReport