G20 backs new tax transparency plan

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A new global standard on transparency was endorsed by G20 finance ministers meeting in Moscow on Saturday, giving added impetus to the international crackdown on tax evasion.

New rules to promote automatic exchange of tax information between countries were outlined as part of the G20’s two-pronged attack on tax avoidance and evasion.

It followed the publication on Friday of plans to tackle weaknesses in the international corporate tax rules, which were the centrepiece of an ambitious drive to crack down on multinational tax planning.

The Paris-based Organisation for Economic Co-operation and Development set out a new standard for automatic tax information which is expected to become operational in 2014.

The proposal set out the legal and administrative framework being developed to ensure confidentiality and prevent misuse of the data.

It defined the types of financial information to be exchanged automatically which included interest, dividends, account balance and income from certain insurance products. It also included sales proceeds from financial assets and other income generated by assets or from payments made with respect to the account.

Countries that have signed a treaty countering tax evasion will be able to opt into automatic exchange of information using a standardised agreement.

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