Financial Transparency Coalition

When the G20 signed the Convention on Mutual Administrative Assistance in Tax Matters in November 2011, amid great fanfare, the OECD, a club of wealthy countries, set out to promote it as the 'gold standard' of international tax cooperation. As is often the case (see here or here), the OECD's viewpoint is not quite the full story. While the Convention definitely provides various positive things -- most importantly a tacit assertion that automatic information exchange must be part of effective information exchange -- it also includes clear downsides.

About two weeks ago, I wrote about the “upward trajectory” of India’s stance on black money and transparency in international finance. I predicted that the country (eventually) would become a leader in this arena. In case you’ve missed India’s catapult into this discussion, here’s the background. In April of 2009, after becoming very upset by the evidence there are rivers of ‘black money’ flowing out of India, the president of the Bharatiya Janata Party (BJP), Rajnath Singh, told voters that if they elected his party into office he would, within 100 days, “bring back all the black money stashed in foreign...

In April of 2009, after becoming very upset by the evidence there are rivers of ‘black money’ flowing out of India, the president of the Bharatiya Janata Party (BJP), Rajnath Singh, told voters that if they elected his party into office he would, within 100 days, “bring back all the black money stashed in foreign banks and distribute among ‘the common poor people.’” As we know, the BJP did not come to power in India in 2009 so fortunately for Rajnath Singh, his party never needed to prove this monumental task was possible. It’s not, by the way. At the...

In Germany, the Social Democratic Party (SPD) has come out against the deal. Meanwhile, the European Commission has also said it will have to assess the legality of the deals but has not taken a firm position. The final withholding tax concept, known as ‘Rubik,’ was initially formulated by the Association of Foreign Banks in Switzerland (AFBS) and by Swiss banks to protect banking secrecy against the international moves towards automatic tax information exchange, which followed the global financial crisis.

SPD Plans to Block Rubik Ratification in Germany

The SPD’s financial concept note published last Monday rejects the agreement with Switzerland. It is...