Source: International Adviser

More than 50 nations signed a new international standard for the automatic exchange of information today with the aim of reducing the global facilitation of tax evasion.

The Multilateral Competent Authority Agreement commits its 51 members to the exchange of non-resident financial account information with tax authorities in an account holders’ country of residence.

Participating countries must automatically send and receive pre-agreed information each year, with the hope of “enabling the discovery of formerly undetected tax evasion”.

Unlike other sharing agreements, a receiving tax authority will not have to ask for information under powers which are currently contained in many bilateral tax agreements between sovereign nations.

The list of countries who have signed up to the agreement include the United Kingdom, British Virgin Islands, Cayman Islands, Germany, Gibraltar, Guernsey, Ireland, the Isle of Man, Jersey, Liechtenstein, Luxembourg, Malta, and South Africa.

The signing took place at the Seventh Meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes in Berlin, Germany.

“Work is not finished”

Speaking at the forum, chancellor George Osborne said: “Tax evasion is a scourge across the world that can only be tackled with a global solution, and today’s agreement is a step towards achieving this.

“The work is certainly not finished, and I would call on the remaining countries to put in the same efforts to stop evasion.

“I am particularly pleased that Britain has been able to be part of this and I much welcome the future benefits it will bring.”

To aid the implementation of the agreement, the Global Forum has invited developing countries to join the move towards automatic exchange of information, and a series of pilot projects will offer technical assistance to facilitate the move.

Ministers and other representatives of African countries also agreed to launch a new “African Initiative” to increase awareness of the merits of transparency in Africa.

Read more here: International Adviser