The Organization for Economic Cooperation and Development (OECD) has identified four steps necessary for transparency and the automatic exchange of information regarding financial accounts through a cost effective and secure system, in an effort to end offshore tax evasion. On June 18, 2013, the OECD issued a report regarding the need to create a more equitable and transparent global tax system to the Group of Eight (G8), a forum for the governments of eight of the world's eleven largest national economies.
The four steps the OECD recommends are to 1) enact legislation to expand each country's network of partner jurisdictions; 2) select a legal basis for the exchange of information; 3) adapt the scope of reporting and due diligence requirements; and 4) develop common or compatible information technology standards.
While these may seem to be significant steps, it is the mission of OECD to promote policies that will improve the economic and social well-being of people around the world. The OECD works with governments to solve common problems. In this case, the recommendation will assist in bolstering sustainable growth through global solutions to tax evasion and avoidance.
A growing number of European and non-European countries have agreed to join a pilot for the implementation of the standard.
To read the complete OECD report, click here.