Figures released on June 30th, 2020 by the Global Forum on Transparency and Exchange of Information for Tax Purposes, show the tremendous progress the international community is making in the fight against offshore tax evasion.
Offshore tax evasion is the use of illegal means to avoid paying taxes on offshore or foreign income. It is a major concern from a public policy perspective as it reduces government revenues, impacts the fairness of the tax system, and is often related to other illegal activities such as money laundering, terrorist financing, and corruption. The Common Reporting Standard (CRS) calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. In 2019, tax authorities were able to obtain information on 84 million financial accounts held offshore by their residents. Voluntary disclosure programs, offshore tax investigations, and related measures have generated a staggering €102 billion in additional revenues.*
“Automatic exchange of information is a game-changer,” says OECD Secretary-General Angel Gurría. In 2019, nearly 100 countries carried out automatic exchange of information (AEOI). Many developing countries have joined the process and more are expected to join in the coming years. “Countries are going to raise much-needed revenue, especially critical now in light of the current COVID-19 crisis, while moving closer to a world where there is nowhere left to hide.”
AEOI Software for Tax Administrations
Thanks to the Common Reporting Standard, countries can access valuable new information and empower their tax administrations to ensure that offshore accounts are being properly declared. BearingPoint Caribbean has a 35+ year track record of supporting tax authorities with software. In 2015 we developed the Multi Data Exchange Solution (MDES), a true full-service AEOI package for tax authorities. The software supports the full cycle of international data exchange commitments. It makes it easy for reporting entities to comply, but also facilitates the role of those involved at the competent authority.
MDES has been in use for various cycles, with thousands of reporting entities making use of the portal to submit their reports and executing hundreds of exchanges between jurisdictions. The system has successfully been tested and audited, including periodic security audits to prove our ISO-certified approach covers all security and privacy risks.
“The international community is making great strides to eradicate banking secrecy for tax purposes”, says Managing Director Avinash Grootens. “As a long-standing IT partner to tax authorities in small and developing countries worldwide, we take pride in helping them obtain the benefits from the international exchange of information.”
Find out more about our MDES software here
*source: Global Forum on Transparency and Exchange of Information for Tax Purposes