OECD and Non-OECD Economies Agree to Continue Work on Tax Information Exchange

Released by the Organization for Economic Cooperation and Development

Participants at a meeting of the OECD Global Forum on Taxation in Berlin on 3-4 June agreed on a process aimed at achieving high standards of transparency and information exchange in a way that is fair and equitable and permits fair tax competition between all countries.

The Global Forum brought together representatives of 44 OECD and non-OECD governments to discuss proposals developed jointly by representatives from Australia, the Bahamas, the Cayman Islands, France, Germany, Isle of Man, Japan, Jersey, Mauritius, Panama, Samoa, St. Kitts and Nevis, Seychelles and the United States. Participants welcomed these proposals, which they endorsed and included in their Global Forum report "A Process for Achieving a Level Playing Field".

The process agreed by the Global Forum participants consists of individual, bilateral and collective actions:

Individual actions. Some countries and jurisdictions may need to modify existing laws and practices to meet the high transparency and information exchange standards that the Global Forum participants wish to see achieved. In addition, participants will explore what their governments can do to promote the adoption of transparency and exchange of information by those not yet in the process. This would include pursuing these issues in other groups or organisations of which they are members.

Bilateral actions. Participants are encouraged to continue to strive to achieve effective exchange of information and transparency by 2006. Nevertheless, it is recognised that flexibility is required since many participants have not yet initiated negotiations of the bilateral agreements required. Further, countries may wish to depart from the 2006 date where it is in their mutual interest.

Collective actions. The participants agreed to:

-- Carry out a review of the transparency and information exchange practices currently applied by financial centres (including all OECD countries, the 33 Non-OECD Participating Partners and significant financial centres that are not yet part of the Global Forum process). The reviews will be summarised in a factual report which will demonstrate the extent to which there is convergence on the implementation of the transparency and information exchange standards.

-- Engage in a dialogue with significant financial centres that are not currently participating in this work. Other financial centres, including the 5 jurisdictions currently on the OECD List of Unco-operative Tax Havens, will be invited to participate in the work towards a level playing field. This will help to shift the process from one of listing to one that is more voluntary, inclusive and participatory.

The Global Forum participants expressed their appreciation for the practical approach adopted by the sub-group that developed the initial proposals and asked the sub-group to continue to play a role in the development and completion of the collective actions.

The Global Forum participants welcomed the constructive nature of the discussions in Berlin and looked forward to working with financial centres which have not yet participated in this dialogue. They expressed confidence that a more inclusive discussion will lead to the achievement of the common goal of promoting fair tax competition in the area of financial services.

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