Tags: Bank | Data-Sharing | Tax Dodgers | Cheats

Bank Data-Sharing Accord Expands Global Push Against Tax Dodgers

Wednesday, 29 October 2014 07:39 AM

Governments are closing in on tax evaders with a data-sharing agreement that broadens efforts by the U.S. and the five biggest European Union economies to at least 50 countries and territories.

The accord to be signed by finance ministers in Berlin today signals global determination by governments to capture tax revenue after the U.S. pursued banks such as Credit Suisse for helping Americans cheat on their taxes and German authorities bought CDs containing stolen bank data.

“It’s really the beginning of the end” of bank secrecy, Pascal Saint-Amans, head of the Organization for Economic Cooperation and Development’s center for tax policy and administration, said in a phone interview.

Joining the pledge to automatically exchange data collected by financial institutions are most EU countries, Liechtenstein, Mexico, Argentina, South Korea and jurisdictions such as Bermuda, the Cayman Islands and the Isle of Man. Ministers from Germany, France, the U.K., Italy and Spain are presenting the accord at a news conference at 3:30 p.m. Berlin time.

More than 40 countries have agreed to adopt the standard starting in 2017. Others, including Switzerland, Brazil, Canada, China, Hong Kong, Monaco and Russia, have committed to start in 2018, according to OECD documents.

While the Paris-based OECD doesn’t have a global estimate of undeclared funds, voluntary disclosure initiatives by 20 countries have generated 37 billion euros ($47 billion) since 2009, Saint-Amans said.

Soccer Star

Germany, where Chancellor Angela Merkel is seeking to balance the federal budget next year for the first time since 1969, has helped lead the push against bank secrecy, prompting discord with Switzerland, which isn’t an EU member and refused to help Germany in tax probes. Prominent German cases such as former Bayern Munich soccer club president Uli Hoeness focused public attention on tax evasion.

“The unambiguous, clear message of this conference will be that tax evasion isn’t worth it anymore, that this is over now,” Finance Ministry spokesman Martin Jaeger said on Oct. 27.

The global crackdown has been illustrated by the U.S. government’s pursuit of Swiss banks, including a $2.6 billion fine in May against Credit Suisse Group AG after its main subsidiary admitted helping Americans cheat the Internal Revenue Service.

More than 100 Swiss banks seeking to avoid U.S. prosecution asked the Justice Department on Oct. 21 to back off a dozen demands, including that they cooperate with other nations. The demands were part of a disclosure program tied to a proposed non-prosecution agreement signed on to by about a third of Swiss banks in a bid to avoid the six-year IRS crackdown.

Seeking Switzerland

While Switzerland won’t be an early adopter of the Berlin agreement, its government has a mandate to negotiate with the EU. A German official who briefed reporters this week expressed optimism that the Swiss will join.

The template for automatic exchange is the 2010 U.S. Foreign Account Tax Compliance Act, which tightens reporting requirements for non-U.S. financial accounts. The five biggest EU economies — Germany, France, the U.K., Italy and Spain — agreed last year to exchange data among themselves along the lines of FATCA.

The OECD and partner countries are also working on plans for a global exchange of information to combat tax-avoidance strategies used by companies such as Google Inc., Apple Inc. and Yahoo! Inc. Multinational companies hold an estimated $2 trillion in low tax jurisdictions, OECD Secretary-General Angel Gurria has said.

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Governments are closing in on tax evaders with a data-sharing agreement that broadens efforts by the U.S. and the five biggest European Union economies to at least 50 countries and territories.
Bank, Data-Sharing, Tax Dodgers, Cheats
Wednesday, 29 October 2014 07:39 AM
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