The Fight against Offshore Tax Evasion

“The world is quickly becoming a much smaller place, both for tax evaders and tax administrations. We expect a truly significant amount of additional financial information to circulate among authorities in the coming years, resulting in less tax evasion, greater tax revenues and a fairer tax system for honest taxpayers,” OECD Secretary-General Angel Gurria remarked during his speech on June 3rd at the Signing Ceremony of the Multilateral Competent Authority Agreement for the Automatic Exchange of Financial Account Information.

With this speech, seven new countries, including Canada, joined others in the global community to quell offshore tax evasion. The Multilateral Competent Authority Agreement (MCAA) is a multilateral framework agreement that outlines the details of what information is to be exchanged, and when. Its’ goal is to modernize international tax and ensure taxes are being paid properly; the standards of which will help turn these goals into actions.

Since this declaration was adopted, “37 billion euros [have been] collected by two dozen countries under voluntary compliance initiatives,” noted Gurria.

With Canada, Australia, Chile, Cost Rica, India, Indonesia and New Zealand signing the MCAA, the number of participating regions is now at 61. This is a large step forward in the battle to end offshore tax evasion. The MCAA implements the Standard for Automatic Exchange of Financial Information in Tax Matters, which will launch the first automatic information exchanges in 2017-18.