Tackling tax avoidance and evasion

Summary

The G20 has made significant strides in combating tax evasion and avoidance since the 2008 financial crisis. The OECD has played a pivotal role in establishing global tax transparency standards and the BEPS package. Over 150 jurisdictions collaborate through the Global Forum, leading to the implementation of over 5,000 tax information exchange agreements. As a result, nearly half a million individuals have disclosed hidden assets, recovering 95 billion euros. The G20 continues to focus on resolving tax challenges posed by digitalization, aiming to achieve a fairer and more sustainable international tax system by the end of 2020.

Takeaways

• 💼 The G20 has made significant strides in combating tax evasion and avoidance post-2008 economic crisis.
• 🌍 International tax rules previously allowed legal but artificial profit shifting to low-tax jurisdictions.
• 🔍 The OECD and G20 collaborated to implement global tax transparency standards and the BEPS (Base Erosion and Profit Shifting) package.
• 📈 Since 2009, there has been a massive increase in tax transparency standards implemented worldwide.
• 🔄 Over 5,000 tax information exchange agreements are now in place, up from just 40 in 2008.
• 💼 In 2017 and 2018, 47 million offshore accounts were reported, with a total value of €4.9 trillion.
• 🏦 In anticipation of information exchange, nearly half a million individuals disclosed their hidden assets.
• 💶 €95 billion in tax revenue has been recovered as a result of these measures.
• 📉 The system has also led to a 20-25% reduction in foreign-owned offshore bank deposits.
• 📝 15 measures were developed to tackle tax avoidance strategies used by multinationals.
• 🌐 Over 125 countries and jurisdictions are now part of the OECD/G20 Inclusive Framework on BEPS.
• 🔄 2000 agreements for country-by-country exchanges are in place to monitor multinationals' financial activities.
• 🔒 A multilateral convention is working to close loopholes in thousands of tax treaties.
• 💡 The current focus is on addressing the tax challenges posed by digitalization and finding a consensus-based solution by the end of 2020.
• 🌐 A coordinated global approach is necessary to ensure a fairer and more sustainable international tax system.

Q & A

What was the major success story of the G20 following the 2008 economic crisis?

The major success story was the fight against tax evasion and avoidance, which led to the implementation of global tax transparency standards and the OECD G20 base erosion and profit shifting package.

What was the role of the OECD in combating tax evasion and avoidance?

The OECD delivered two impactful projects that led to the implementation of global tax transparency standards and the OECD G20 base erosion and profit shifting package.

How has the G20 supported developing countries in implementing tax transparency standards?

The G20 has committed to supporting developing countries through technical assistance in implementing these projects.

What is the Global Forum on transparency and exchange of information for tax purposes?

It is an organization that includes more than 150 member countries and jurisdictions working together on an equal footing to implement tax transparency standards globally.

How has the number of tax information exchange agreements changed from 2008 to the present?

In 2008, only about 40 agreements were in place, but today there are over 5,000.

What was the impact of the automatic exchange of information on individuals with hidden assets?

In anticipation of the exchange, almost half a million individuals came forward to disclose their hidden assets.

How much has been recovered in terms of tax revenue due to the automatic exchange of information?

So far, 95 billion euros has been recovered.

What was the estimated reduction in foreign-owned offshore bank deposits due to the new tax transparency system?

The system has reduced foreign-owned offshore bank deposits by 20 to 25 percent.

What are the 15 measures developed by the OECD and G20 to tackle tax avoidance caused by base erosion and profit shifting (BEPS)?

The measures are part of a package developed to address tax avoidance by multinational companies, but the specific details of each measure are not provided in the script.

How many countries and jurisdictions are working together to monitor the implementation of the BEPS measures?

Over 125 countries and jurisdictions are working together through the OECD G20 inclusive framework on BEPS.

What is the current major priority in addressing tax challenges arising from digitalization?

The major priority is to resolve the tax challenges arising from digitalization by reaching a consensus-based long-term solution by the end of 2020.

What are the two pillars that will explore fundamental changes to the international tax system?

The script does not specify the two pillars, but they are part of the work to address tax challenges arising from digitalization.