War of the (Offshore) Worlds: OECD Level Playing Field Report
Richard J. Hay
The Organisation for Economic Co-operation and Development released a seminal report on tax information collection and exchange practices on 29 May.1 The study, entitled Tax-Cooperation: Towards a Level Playing Field2 (the “Report”), took nearly two years to prepare and is a definitive comparison of the disclosure standards applied in the 82 countries surveyed. The Report appears in the context of an ambitious OECD program seeking global data tracking and exchange to improve the tax enforcement capability of its members.
The controversy over comparative standards is not an arid debate over regulatory policy; big money is at stake. Financial services generate two trillion US dollars in annual revenue. This is forecast to triple by 2020 and to account for 10% of global GDP.3 International financial services are highly mobile, and consumers readily shift jurisdictions to pursue regulatory arbitrage opportunities. The new Report will accordingly shape the odds for jurisdictional success or failure in one of the most profitable sectors of the global economy.
This paper considers the controversial background for the OECD program on international tax information exchange and reviews the key findings in the new Report.
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