Switzerland improving tax transparency, OECD finds

28 Jul 16

Switzerland is one of ten countries said to have made sound progress toward greater tax transparency in recent years, according to the OECD.

The nation, notoriously a haven for financial secrets, has been rated as “largely compliant” with the international standard on the exchange of tax information by request, the think-tank announced this week.

It said this “confirms the progress [Switzerland] has made of the past years towards greater transparency and exchange of information”.

However, in order to become fully compliant, Switzerland still needs to improve reporting methods to identify the owner of bearer shares, and modify its practices to enable it to fulfil its obligations to exchange information in regard to requests based on stolen data.

Six other countries were also found to be “largely compliant” with the standard, following a review of the second phase of their implementation of OECD provisions for the exchange of information on request.

They are: Albania, Cameroon, Gabon, Pakistan and Senegal. Reasons for an incomplete compliance rating included requirements to improve supervision and enforcement, the availability of information and problems with organisational processes.

The United Arab Emirates was found to be “partially compliant” due to a significant backlog of unanswered requests, but the OECD noted that the country only established a unit for the exchange of tax information in 2014.

Ukraine and Liberia were both considered to have made sufficient progress to graduate to stage two implementation reviews. There are currently seven jurisdictions that remain blocked from moving on to these due to insufficiencies in their legal and regulatory frameworks.

Overall, the OECD’s Global Forum on Tax Transparency and Exchange of Information for Tax purposes has completed 235 peer reviews, and assigned compliance ratings to 101 jurisdictions following phase two implementation reviews.

Twenty-two have been rated “compliant”, 67 as “largely compliant”, and 12 as “partially complaint”.

The OECD said this week’s compliance ratings show that the international community is continuing to move toward greater tax transparency.

The forum’s total membership stands at 135, following Egypt’s recent decision to join.

It is intended to support participating countries in implementing internationally agreed standards on transparency and the exchange of tax information.

It is also working to monitor the progress of countries preparing to engage in the automatic exchange of information, which will start next year.

The ability to interrogate information from other jurisdictions and to cross-reference it with national data, will, it is hoped, make the practice of cross-border tax avoidance much easier to spot, and more difficult to carry out.

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