Nov. 4/11 (oecd) – All G20 governments have now agreed to a multilateral convention to tackle tax evasion more effectively.

The Multilateral Convention on Mutual Administrative Assistance in Tax Matters offers a wide range of tools for cross-border tax co-operation. It includes automatic exchange of information, multilateral simultaneous tax examinations and international assistance in the collection of tax due. At the same time, the Convention imposes safeguards to protect the confidentiality of the information exchanged.

“Today we have taken a major step forward to improve global tax cooperation”, said OECD Secretary-General Angel Gurría from the Cannes G20 Summit. “The OECD looks forward to continuing to work with the G20 and other countries to maximize the benefits from this powerful multilateral instrument. Tax co-operation and compliance are of crucial importance for all countries and citizens – and not only in times of a tight fiscal and budgetary environment.”

In 2009, the G20 called for action ‘to make it easier for developing countries to secure the benefits of the new cooperative tax environment, including a multilateral approach for the exchange of information’. In response, the OECD and the Council of Europe developed a Protocol amending the Multilateral Convention to bring it in line with the international standard on exchange of information and to open it up to countries that are neither members of the OECD nor of the Council of Europe.

The instrument reinforces international cooperation to target tax evasion by both individuals and corporations. It complements other initiatives such as that of the Global Forum on Transparency and Exchange of Information for Tax Purposes (see here), supported by the OECD, which already includes 105 countries in an extensive peer review process.

“Now that the G20 countries have led by example, we expect other countries to sign the Convention, said Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration. “As the membership expands, so the effectiveness of the Convention will increase. Over the coming months we will be working with developing countries so that they will rapidly be in a position to sign the Convention,” he added.

This is an excerpt from oecd.org as it appeared on November 4, 2011. For updates or to read the current version of this post in its entirety, please click here.

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