OECD Common Reporting Standard - Sharing Tax Data (100 countries)

Information about bank accounts and financial assets of individuals will soon be shared between almost 100 countries worldwide as part of the OECD’s Common Reporting Standard.

By 2018 the tax authorities will automatically share information about individuals and their offshore tax affairs. The information from financial institutions such as banks, investment and insurance firms will include account balances, levels of interest and returns and dividends from the sales of shares.

At present, if HMRC suspects an individual of tax evasion or tax avoidance, it has to write to the relevant offshore institutions and tax authorities in order to request the information to help build their case. The new Common Reporting Standard will speed up the process in gathering information about individuals HMRC suspects of having unpaid tax.

Initially there are 58 jurisdictions that have signed up to start sharing information in 2017. The ‘early adopter’ jurisdictions include the UK, Channel Islands and Isle of Man, France, Spain, Portugal, Gibraltar, the Cayman Islands and the BVI.

An additional 35 jurisdictions will begin sharing information in 2018 including, Switzerland, Monaco, UAE, Hong Kong, Singapore, Australia and Canada.

The OECD Common Reporting Standard is geared to helping countries clampdown on tax evasion and to increase their tax revenues which have reduced following the global economic changes.

For those who have committed tax evasion over a number of years this CSR represents a big threat to their financial affairs. It also means that ex pats will fall under increased scrutiny from tax authorities, including HMRC.

For those who would like to explore the possibility of making a voluntary disclosure of unpaid tax to HMRC, there are options such as the Liechtenstein Disclosure Facility (LDF). However, as announced in the latest budget, the option to use the LDF will expire at the end of 2015. HMRC has proposed to introduce a time limited disclosure facility from 1st January 2016 for a period of approximately 18 months.

The new facility is reported to offer less favourable terms than the LDF. For many the time to act is now as HMRC continues to get tough on tax avoidance and tax evasion.

To discuss your options with our experienced and trusted tax investigations and disclosures professionals call us on 0113 387 5670 or fill out an Enquiry Form and we will get back to you straight away in complete confidence.