Nearly 100 countries carried out automatic exchange of information in 2019, enabling their tax authorities to obtain data on 84 million financial accounts held offshore by their residents, covering total assets of 10 trillion euros, a note from OECD observed.
This represents a significant increase over 2018, where information on 47 million financial accounts was exchanged, representing 5 trillion euros. The growth stems from an increase in the number of jurisdictions receiving information as well as a wider scope of information exchanged, OECD said.
The Common Reporting Standard --- a global information standard developed in 2014 for the Automatic Exchange Of Information regarding financial accounts between tax authorities -- requires countries and jurisdictions to exchange financial account information from non-residents obtained from their financial institutions annually, reducing the possibility for offshore tax evasion. Many developing countries have joined the process and more are expected to join in the coming years.
“Automatic exchange of information is a game changer,” OECD Secretary-General Angel Gurría said. “This system of multilateral exchange created by the OECD and managed by the Global Forum is providing countries around the world, including many developing countries, with a wealth of new information, empowering their tax administrations to ensure that offshore accounts are being properly declared. Countries are going to raise much needed revenue, especially critical now in light of the current Covid-19 crisis, while moving closer to a world where there is nowhere left to hide.”
Since the G20 declared an end to bank secrecy in 2009, the international community has continued to make strides in the fight against offshore tax evasion. Under the Global Forum -- which brings together 161 countries and jurisdictions committed to OECD tax standards -- countries have ramped up global co-operation, first through exchange of information on request and through automatic exchange since 2017, implemented through more than 6,000 bilateral relationships worldwide in 2019.
Wider exchange of information driven by the Global Forum was associated with a global reduction in foreign-owned bank deposits in international financial centres by 24 per cent ($410 billion) between 2008 and 2019. Voluntary disclosure programmes, offshore tax investigations and related measures before the start of automatic exchange in 2017 and since then, have already led to the identification of more than 100 billion euros of additional tax revenues worldwide.