Global group crafts new tax evasion rules

Governments would automatically exchange information from banks with one another, under a new draft proposal aimed at cracking down on tax evasion.

{mosads}Under the rules from the Organization for Economic Cooperation and Development (OECD), countries would also be forced to share information from financial brokers and other investment managers, in addition to banks.

The OECD’s secretary general, Angel Gurría, calld the new rules “a real game changer.”

“Globalization of the world’s financial system has made it increasingly simple for people to make, hold and manage investments outside their country of residence,” Gurría said in a statement. “This new standard on automatic exchange of information will ramp up international tax co-operation, putting governments back on a more even footing as they seek to protect the integrity of their tax systems and fight tax evasion.”

More than 40 countries have already agreed to adopt the standards, though Switzerland is yet to commit either way. The Swiss, long known for their bank secrecy, have been increasingly cooperative with American and global efforts against tax evasion in recent years.

The OECD said its new draft builds on a U.S. law aimed at cracking down on offshore tax evasion, the Foreign Account Tax Compliance Act (FATCA). Both the financial industry and the GOP are sharp critics of that law, which is scheduled to go into effect in July.

The OECD, a group of close to three dozen emerging and market economies, crafted the rules with the Group of 20 nations. G20 finance ministers will consider the rules later this month.