Preliminary findings of an upcoming OECD study show that automatic exchange of information has reduced cross-border bank deposits in 46 international financial centers (IFCs) traditionally associated with offshore activity by 20–25 percent since 2008, an OECD report released today said.
The report, prepared by the OECD for a meeting of G20 finance ministers this weekend in Fukuoka, Japan, states altogether, IFC deposits have fallen by 34 percent over the past ten years, declining by USD 551 billion. The study concludes that automatic exchange of information, exchange of information on request, and other causes contributed to the decline. It states also that the findings suggest that exchange of information is promoting tax compliance and reducing offshore hidden wealth.
Deposits of non-bank financial institutions, households, and corporations were assessed. The IFCs considered in the study were taken from an amended IMF list, as follows: Andorra, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Barbados, Belize, Bermuda, British Virgin Islands, Cayman Islands, Cook Islands, Costa Rica, Curacao, Cyprus, Dominica, Gibraltar, Grenada, Guatemala, Guernsey, Hong Kong, Isle of Man, Jersey, Lebanon, Liechtenstein, Luxembourg, Macao, Malaysia, Malta, Marshall Islands, Mauritius, Monaco, Montserrat, Nauru, Niue, Palau, Panama, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Samoa, San Marino, Seychelles, Singapore, Switzerland, Turks and Caicos Islands, United Arab Emirates, Uruguay, and Vanuatu.
In these IFCs, most counterparties of the financial institutions’ liabilities and assets are non-residents.
The complete study is expected to be published later this year.
“The international community has brought about an unprecedented level of transparency in tax matters, which will bring concrete results for government revenues and services in the years to come,” said OECD Secretary-General Angel Gurria.
“The transparency initiatives we have designed and implemented through the G20 have uncovered a deep pool of offshore funds that can now be effectively taxed by authorities worldwide. Continuing analysis of cross-border financial activity is already demonstrating the extent that international standards on automatic exchange of information have strengthened tax compliance, and we expect to see even stronger results moving forward,” Gurría said.
Separately, the OECD reported that data on 47 million offshore accounts, valued at about EUR 4.9 trillion, have been exchanged between governments since 2018, through automatic exchange of information.
More than 90 jurisdictions have participated in automatic exchange of information, accomplished through 4,500 bilateral agreements, the OECD said.
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