Fifty Countries Started Automatic Fiscal Data Exchange as of September 30, 2017 by Marcelo Castro Alves
Fifty countries started automatically exchanging tax information for their residents, a step closer to ending bank secrecy, but that does not solve all the problems related to tax fraud.
On September 30, the British territories of Anguilla, Bermuda and Cayman Islands, among others, ceased to be tax havens and became the first countries to automatically share their citizens’ bank details, a measure demanded by the Organization for Economic Cooperation and Development (OECD).
The list of the first 50 countries includes almost all the Member States of the European Union, ten dependent territories of the United Kingdom and Denmark, as well as some prominent members of the G20, such as South Africa, Argentina, South Korea, India and Mexico.
As of September 30, 2017, if a Frenchman, for example, opens an account in Liechtenstein, the Paris tax authorities will not need to ask for information from Vaduz, since it will automatically be informed of the bank balance, as well as interest, dividends and other sales of stocks and bonds.
This change is the fruit of a decade of fighting tax evasion, which has become a global priority after the financial crisis of 2008.
A second series of countries will apply the same measure from September 2018, such as Andorra, Monaco, Singapore, Switzerland, Brazil, China, Russia and Japan.
The United States, one of the great absentees of the global scheme, already has dozens of bilateral agreements on the exchange of banking data, especially with Luxembourg, Monaco and Switzerland.
Now, to hide money abroad, you will have to go through “corrupt lawyers and dubious financial institutions,” that is, using “extremely complex and much riskier circuits,” OECD explains.
Automatic exchange “profoundly changes the nature of things.” For example, “Swiss bankers no longer accept clients who do not declare their assets” and “a lot of people have declared their accounts overseas,” OECD said.
About 50 countries and territories accepted the automatic exchange of accounting and tax information.