International efforts to combat tax evasion and avoidance got a boost as additional countries and jurisdictions agreed to join more than 60 other countries in tax co-operation through a key multilateral tax instrument during the first day of a global meeting in Jakarta, Indonesia.
Liechtenstein and San Marino became the 62nd and 63rd signatories of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters at a ceremony marking the first day of the 21-22 November meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes.
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The Global Forum brings together 121 countries and jurisdictions for wide-ranging discussions on transparency and international tax co-operation, and is the largest such group worldwide. Its sixth meeting has brought together more than 200 delegates from 86 member jurisdictions and 11 international organisations.
A key topic of discussion is the move by tax authorities worldwide from bilateral to multilateral cooperation and from exchange of information on request to automatic exchange of information.
The Convention provides a comprehensive multilateral framework for such co-operation and complements other initiatives, such as the standardised multilateral automatic exchange model being developed by the OECD and its G20 partners. This Convention is seen as the ideal instrument to swiftly implement automatic exchange, and to do so with a wide range of partners.
The Convention also provides for spontaneous exchange of information, simultaneous tax examinations and assistance in tax collection.
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By GlobalDataA valuable tool for governments to fight offshore tax evasion, the Convention also ensures compliance with national tax laws and respects the rights of taxpayers by protecting the confidentiality of the information exchanged.
Tax co-operation and compliance are of crucial importance for all countries and citizens – and not only in times of a tight fiscal and budgetary environment.
Canada, New Zealand, the Slovak Republic and South Africa deposited instruments of ratification, while the Philippines and the Seychelles signed letters of intention to sign the Convention.
Another important development is the deposit by the United Kingdom of declarations extending the territorial scope of the Convention to cover the following jurisdictions: Isle of Man (Crown Dependency) and Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Montserrat, and Turks & Caicos (Overseas Territories).
Participants in the Global Forum noted that support for the Convention’s central transparency and information exchange objectives is increasing rapidly, while the number of jurisdictions that have signed or are covered by the Convention has almost doubled since the Fifth Global Forum meeting in October 2012 in Cape Town.
At present, 63 countries have signed the Convention, four have signed letters of intention to sign and 13 jurisdictions are now covered by way of territorial extension. This includes recent signatories Andorra, Hungary, Switzerland and Chile, as well as Monaco, which signed a letter of intention to sign the Convention earlier this month. Thirty six signatory countries have now deposited their instruments of ratification.
