Globe-Spanning Accord to Halt Tax Dodgers to Be Signed This Week
Oct. 27 (Bloomberg) — Finance ministers from at least 37 countries will take the biggest step yet in fighting tax evasion at a conference this week hosted by Germany’s Wolfgang Schaeuble, German officials said.
Fifty states and jurisdictions are sending representatives to Berlin to sign an agreement on Oct. 29 on the automatic exchange of financial information to curb tax dodging, Finance Ministry Spokesman Martin Jaeger told reporters in Berlin.
“The unambiguous, clear message of this conference will be that tax evasion isn’t worth it any more, that this is over now,” Jaeger said. “This is an impressive example of international cooperation.”
Global moves toward fighting tax evasion have accelerated since the U.S. put the Foreign Account Tax Compliance Act into force in 2010. That tightened reporting requirements for non- U.S. financial accounts and since then the initiative has spread across the globe, driven by the European Union’s five biggest economies, as financial crises sapped their tax revenue.
The automatic exchange of information will help authorities pinpoint tax evaders without having to gather evidence to build a case first, a German government official told reporters in Berlin today. The official asked not to be named because the agreement isn’t signed yet.
Germany in the past relied on stolen bank data to put pressure on tax dodgers to declare. That led to tension with the Swiss government, which refused to offer legal assistance to pursue suspected evaders.
While Switzerland won’t be among the “early adopters” backing the agreement, its government has a mandate to negotiate with the EU and Germany is optimistic that the Swiss will eventually join the accord, the German official said.
The signatories will agree to collect data from new accounts starting Jan. 1, 2016 and exchange that information between tax authorities starting September 2017, Jaeger said. The automatic information exchange has the general backing of 65 states, including countries such as Singapore, Jaeger said.
To contact the reporter on this story: Rainer Buergin in Berlin at rbuergin1@bloomberg.net To contact the editors responsible for this story: Alan Crawford at acrawford6@bloomberg.net Tony Czuczka, Ben Sills
