More NewsOECD attacks tax information sharing restrictions

OECD attacks tax information sharing restrictions

'Dual criminality' rule singled out for criticism in Switzerland, Andorra and the Cook Islands

Switzerland, Andorra, the Cook Islands and Samoa have been singled out in an

Organisation for Economic Cooperation and Development report (OECD) for
still applying a restrictive ‘dual criminality’ principle in swapping
sensitive tax information with other governments.

In a comprehensive report on tax havens, the OECD notes that Switzerland, a
member government, has also not adopted a common definition of tax fraud, which
was drawn up for members to deal with these problems. Under dual criminality
rules, governments refuse to hand over data, where they think a foreign customer
of
a bank in its jurisdiction would be behaving legally in its own domestic
system – even if their home country considers them guilt of tax fraud.

Luxembourg is the only other OECD country not adopting the organisation’s

tax fraud guidelines, but it does not operate a dual criminality system.

Overall, however, the report lauds tax havens, saying they are cleaning up

their act regarding transparency and honest practice. ‘Most have entered
into double taxation conventions and/or tax information exchange agreements,

and many are engaged in negotiations for such agreements’, said the report,

which gives detailed notes on the banking secrecy status of 82 OECD and
non-OECD countries.

A key issue, it said, was that no OECD countries and few
non-OECD economies now insist that a bank customer pay tax locally to
respond to a foreign request for information.

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