OECD Split Threatens Tax Evasion Plans

by Robin Pilgrim, LawAndTax-News.com, London

13 October 2003

The OECD initiative designed to combat tax evasion is nearing collapse, according to a report in the Financial Times last week.

The business daily revealed that the Organisation is split over provisions in the plan offering improved access to bank information, and over the definition of tax fraud.

"At the September meeting of the OECD's governing council, Switzerland and Luxembourg blocked agreement on a common definition of tax fraud that could apply when exchanging bank information between nations," the report explained, continuing:

"They also objected, together with Austria and Belgium, to a deadline of December 2005 for access to bank information for verification of residents' tax liabilities."

Switzerland and Luxembourg are reported to have objected to the proposals on the grounds that they contradict the European Savings Tax Directive.

Speaking to the FT ahead of this week's meeting between the OECD and representatives from offshore finance centres, Glenroy Forbes of the International Trade and Investment Organisation (ITIO) observed that:

"The OECD has praised our cooperation but is sadly unable to deliver its own key members. The [Ottawa meeting] will need to consider whether to take the OECD's road or the EU's or whether to make no further progress."

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