OECD Turns Spotlight On Switzerland And Luxembourg

by Ulrika Lomas, Tax-News.com, Brussels

22 April 2002

According to reports last week, following the release of its amended list of nations considered uncooperative in the fight against international tax evasion, the Organisation for Economic Cooperation and Development (OECD) is now turning its thoughts to member countries such as Luxembourg and Switzerland, which have been 'permanent abstainers' throughout the negotiation process.

The two European countries were identified in a report in 2000 as permitting 'potentially harmful tax practices', and in view of the level playing field concerns expressed by almost all of the non-members which have reached agreements with the OECD, many feel that something must now be done to force them to comply with the same rules as everybody else.

'Ultimately where we are moving with this project is not actually a distinction between OECD and non-OECD countries,' the body's Fiscal Affairs Committee Chairman, Gabriel Mahklouf, explained. 'It is between jurisdictions and countries that are prepared to cooperate in the project and those that are not.'

Although jurisdictions outside of the OECD have until 2005 to abolish 'harmful' tax practices, member countries are obliged to have moved on tax reform by April 2003.

An unnamed senior OECD official told the Financial Times on Friday that the multilateral organisation is now considering what sanctions can be imposed on Switzerland and Luxembourg after the 2003 deadline.

Recommended