Tax information sharing causes 25% drop in IFC bank deposits: OECD

Automatic exchange of information (AEOI) on financial accounts has reduced bank deposits held in 46 key international financial centres (IFCs) by 25% since 2008. This is revealed in an Organisation for Economic Co-operation and Development (OECD) report. The findings suggest that exchange of information is promoting tax compliance and reducing offshore hidden wealth.

“The international community has brought about an unprecedented level of transparency in tax matters, which will bring concrete results for government revenues and services in the years to come,” said OECD secretary-general Ángel Gurría.

According to the OCED report to the recent G20 in Japan, countries worldwide have recovered over EUR 95 billion in taxes from taxpayers that came forward and disclosed formerly concealed assets and income. This was done through voluntary compliance mechanisms and other offshore investigations. An additional EUR 2 billion has been recovered since November 2018.

“The transparency initiatives we have designed and implemented through the G20 have uncovered a deep pool of offshore funds that can now be effectively taxed by authorities worldwide. Continuing analysis of cross-border financial activity is already demonstrating the extent that international standards on automatic exchange of information have strengthened tax compliance, and we expect to see even stronger results moving forward,” Gurría added.

Deposits of non-bank financial institutions, households, and corporations were assessed. The IFCs considered in the study were taken from an amended IMF list, as follows: Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Barbados, Belize, Bermuda, BVI, Cayman Islands, Cook Islands, Costa Rica, Curacao, Cyprus, Dominica, Gibraltar, Grenada, Guatemala, Guernsey, Hong Kong, Isle of Man, Jersey, Lebanon, Liechtenstein, Luxembourg, Macau, Malaysia, Malta, Marshall Islands, Mauritius, Monaco, Montserrat, Nauru, Niue, Palau, Panama, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Seychelles, Singapore, Switzerland, Turks and Caicos Islands, United Arab Emirates, Uruguay, and Vanuatu.

Transparency Times was unable to determine why New Zealand is not included among the countries included in the survey.

See Tax information sharing causes 25% drop in IFC bank deposits: OECD in InternationalInvestment.net, OECD Secretary-General Report to the G20 finance ministers and central bank governors June 2019 and Using bank deposit data to assess the impact of exchange of information – OECD 2019.

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