Financial Transparency Coalition

If people stash their wealth or earn income overseas, that is fine with us — just as long as their tax authorities get the information they need to tax that wealth or income according to the law, and as long as money laundering and financial crimes can be effectively tracked, and so on. Where there are cross-border barriers to the instruments of democratic societies, then there is an offshore problem. The only credible way to provide the necessary information is through so-called automatic information exchange (AIE), where governments make sure the necessary information is available across borders, as a matter of routine. For years we at the Tax Justice...

There is an old proverb that goes something like this: “one finger cannot lift a pebble.” And while reducing cross-border tax evasion is not like lifting pebble—it’s more like hauling a boulder—it is true that it cannot be achieved unilaterally. No single country can stop, stem, or slow offshore tax evasion by its own citizens without the help of at least one other nation. This is true by definition. Historically much of the bilateral cooperation on tax evasion has been less than amicable. That is changing. Increasingly, we are seeing that the cooperation in matters of tax between nations—particularly wealthy...

Last week, while showcasing draft EU laws on tax transparency, commissioner Algirdas Semeta told media in Brussels he is building "the most comprehensive information exchange system in the world." He added: "The EU system will become even broader than the US system." It is an astonishing claim. The wide-reaching impact of the new US regime - the Foreign Account Tax Compliance Act (FATCA), which came into force on 1 January - has been demonstrated by a storm of angry reactions in worldwide financial centres. Some of Semeta's proposals, notably his amendments to the EU Savings Tax Directive (EUSTD), do broaden the...

Last year Itai Grinberg, Associate Professor at Georgetown University Law Center in the U.S., published an important paper entitled Beyond FATCA: An Evolutionary Moment for the International Tax System, providing a comprehensive overview of the emerging international architecture of financial transparency, with different models of information exchange (see below) jostling for supremacy.