OECD committee calls for more bank information for tax purposes

A committee of the Organisation for Economic Co-operation and Development has recommended that all member countries should permit tax authorities to have access to bank information, directly or indirectly.

A committee of the Organisation for Economic Co-operation and Development has recommended that all member countries should permit tax authorities to have access to bank information, directly or indirectly.

The report, published in Paris, encourages such information so that tax authorities can fully gather taxes and exchange information.

There had been speculation that the report might single out Switzerland for criticism because of its banking secrecy laws, but it does not. It says banking secrecy is widely recognised as playing a legitimate role in protecting the confidentiality of the financial affairs of individuals or legal entities.

However, it adds that banking secrecy towards governmental authorities, including tax authorities, may enable taxpayers to hide illegal activities and to escape paying taxes.

The OECD’s Committee on Fiscal Affairs notes the international trend to increase access to bank information for tax purposes.

“In the light of this trend, the Committee encourages countries to take appropriate initiatives to achieve access for the verification of tax liabilities and other tax administration purposes,” the report says.

The Committee says access to bank information should not be “unfettered”, and the lifting of bank secrecy for tax administration purposes should always be coupled with stringent safeguards to ensure the information is used only for purposes specified within the law.

The Swiss finance minister, Kaspar Villiger has repeatedly said that Switzerland is prepared within the current framework of its withholding tax and banking secrecy laws to make efforts so that Switzerland does not become a haven for EU tax dodgers.

Villiger, as well as the Swiss Bankers Association, are to comment on the report later today.

by Robert Brookes