Tax havens in spotlight as nine countries sign up to international tax protocols

Pressure on British overseas territories amid push to revamp global tax frameworks

PUBLISHED : Thursday, 30 May, 2013, 12:00am
UPDATED : Thursday, 30 May, 2013, 2:18am


A wealth of information about companies and individuals registered in well-known tax havens is set to come to light now that nine more countries have signed up to international tax protocols.

Luxembourg, Singapore and Austria, a traditionally secretive banking jurisdiction, were among the countries adding their names to a list of more than 50 nations who have agreed automatically to exchange tax information, help foreign nations to clamp down on tax debtors and allow countries to conduct wide-ranging joint multiparty tax investigations.

Austrian finance minister Maria Fekter hailed the news, announced at the OECD ministerial meeting in Paris, as a "huge step forward" for her country.

After decades of banking secrecy allowing foreign account holders to conceal assets, Fekter said "recent developments" had persuaded Austria of "the importance of such cross-border co-operation in order to minimise the opportunity for international tax avoidance and evasion".

However, Singapore's deputy prime minister, Tharman Shanmugaratnam, said UK overseas territories needed to come on board to ensure the convention functioned properly.

"Signing the convention reflects Singapore's commitment to tax co-operation based on international standards, but the standards can only work if all financial centres come on board," he said. "Singapore will work with international partners to achieve that, so that … offshore jurisdictions like the British Overseas Territories move together."

Organisation for Economic Co-operation and Development secretary general Angel Gurria said rewriting international tax rules was one of the great challenges for finance ministers.

"The rules which we have built since the 1920s were meant to avoid double taxation," he said. "The problem is we've moved from double taxation to double non-taxation.

"We facilitate the fact that corporations, through transfer pricing practices, put their profits in low-tax jurisdictions and therefore do not pay what would be considered to be their fair share."

He said taxing companies such as Google and Amazon was especially difficult as they were based in the "ether".