OECD plans avoidance crackdown

Tax authority bosses from the world’s richest countries have banded together
to fight international tax avoidance caused by the abuse of increasingly liberal
capital movement and trading laws.

Tax collectors from more than 30 countries – mostly members of the
Organisation for Economic Cooperation and Development (OECD) – met in Seoul,
South Korea to plot against such tax manoeuvres.

At a meeting staged by the OECD’s forum on tax administration, taxmen agreed
to conduct a joint study by 2007 into how accountants, lawyers and tax advisors
were promoting illegal tax evasion and ‘unacceptable tax minimisation

They also agreed to complete ‘a directory of aggressive tax planning schemes
so as to identify trends and measures to counter such schemes.’

And they promised cooperation on training tax officials regarding
international taxation issues, while expanding OECD corporate governance
guidelines to remind companies that paying tax is inevitably linked to good
governance, which brings financial and economic benefits.

Meeting chairman, USA Internal Revenue Service Commissioner Mark W Everson,
noted that enforcement of tax laws has become more difficult as liberalisation
and modern communications have opened financial markets to more taxpayers.

‘While this more open economic environment is good for business and global
growth, it can lead to structures which challenge tax rules,’ he said.

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