- 10th June 2019Global Tax Information Exchange Has Netted States Billions
The OECD has reported on the progress achieved to improve tax transparency internationally under the new Common Reporting Standard (CRS), ahead of the meeting of G20 finance ministers in Fukuoka, Japan. The CRS is the OECD’s new tax transparency standard that provides for the automatic exchange of information between countries to support efforts to tackle fiscal crime. According to the OECD, more than 90 jurisdictions are now exchanging data automatically on more than 47 million offshore accounts, with a value of about EUR4.9 trillion. “The international community has brought about an unprecedented level of transparency in tax matters, which will bring concrete results for government revenues and services in the years to come,” said OECD Secretary-General Angel Gurria. “The transparency initiatives we have designed and implemented through the G20 have uncovered a deep pool of offshore funds that can now be effectively taxed by authorities worldwide. Continuing analysis of cross-border financial activity is already demonstrating the extent that international standards on automatic exchange of information have strengthened tax compliance, and we expect to see even stronger results moving forward.” According to the OECD, voluntary disclosure of offshore accounts, financial assets, and income in the run-up to full implementation of the automatic exchange of information (AEOI) initiative resulted in more than EUR95bn in additional revenue (tax, interest, and penalties) for OECD and G20 countries over the 2009-2019 period. Preliminary OECD analysis drawing on a methodology used in previous studies shows the very substantial impact AEOI is having on bank deposits in international financial centers (IFCs), the OECD said. Deposits held by companies or individuals in more than 40 key IFCs increased substantially over the 2000 to 2008 period, reaching a peak of USD1.6 trillion by mid-2008. However, these deposits have fallen by 34 percent over the past ten years – a decline of USD551bn – as countries adhered to tighter transparency standards. According to the OECD, a large part of that decline is due to the onset of the AEOI initiative, which accounts for about two-thirds of the decrease. Specifically, AEOI has led to a decline of 20 percent to 25 percent in the bank deposits in IFCs, according to preliminary OECD data. The complete study is expected to be published later this year. “These impressive results are only the first stock-taking of our collective efforts,” …
- 10th June 2019EU Takes Action Against Spain Over Rules On Reporting Of Assets
The European Commission is taking Spain to the Court of Justice over the imposition of “disproportionate” sanctions for failure to report assets held abroad.
Spain requires resident taxpayers to submit information on the assets they hold abroad, including properties, bank accounts, and financial assets. Those who fail to submit this information on time and in full are subject to sanctions.
The Commission said that these sanctions are higher than those for similar infringements in a purely domestic situation and may exceed the value of assets held abroad. It described these sanctions as disproportionate and discriminatory.
According to the Commission, these sanctions may deter businesses and private individuals from investing or moving across borders in the EU single market. It said that these provisions are in conflict with the free movement of persons and workers, the freedom of establishment, the freedom to provide services, and the free movement of capital.
The Commission opened infringement proceedings against Spain in 2015 and in 2017 again requested that Spain amend the rules.
- 5th June 2019New CbC Reporting Obligations In Seychelles From 2020
Seychelles has gazetted legislation for the introduction of new country-by-country reporting obligations that multinational entities will be required to comply with starting in 2020.
In line with the OECD’s recommendations in this area, multinational groups whose group gross consolidated turnover was EUR750m (USD843m) or greater in the preceding tax year must file a CbC report within 12 months of the end of any tax year ending December 31, 2019, or thereafter.
In addition, within three months of the end of that tax year, the group should report whether an entity resident for tax purposes in Seychelles is the ultimate parent entity of the group. If not, the entity must identify the UPE and the jurisdiction in which it is registered for tax and will file a CbC report.
A penalty of SCR20,000 (USD1,467) applies for those taxpayers who fail to comply with the new requirements. The penalty applies for wilful non-compliance, failure to correct errors or omissions in CbC reports filed, or for making false statements in CbC reports.
The regime has been transposed into domestic law via the Revenue Administration (Country-by-Country Reporting Multinational Enterprise Groups) Regulations, 2019 (Statutory Instrument 25 of 2019), published in the Official Gazette on April 23, 2019.