OECD will close CRS loopholes

OECD will close actual and pereived loopholes

1. The OECD is to tackle loopholes

The 2016 OECD report to the G20 Finance Ministers, updating on automatic exchange of information that .

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April 2016 OECD report to G20 Finance Ministers
3.1. Ensure the integrity of the CRS
In order to maintain the integrity of the CRS and to avoid a situation where tax evasion behaviour is displaced instead of resolved we will redouble our efforts to maintain the integrity of the CRS. This would include addressing potential loopholes, both actual and perceived and taking action whenever necessary. Moreover we stand ready to provide further guidance on the application of the CRS to trusts and foundations and to develop best practice “anti-abuse” provisions which jurisdictions could draw on in implementing that part of the CRS which requires that “a jurisdiction must have rules in place to prevent any Financial Institutions, persons or intermediaries from adopting practices intended to circumvent the reporting and due diligence procedures”.

2. The OECD CRS Implementation handbook is a living document. The Handbook provides an overview of the legislative, technical and operational issues and a more detailed discussion of the key definitions and procedures contained in the Standard. It is intended to be a living document and will be updated and completed over time.
3. Financial Times 6 December 2016.

Pascal Saint-Amans, the top tax official at the OECD, says the residence-by-investment schemes offered by governments such as Malta, Cyprus and some in the Caribbean will not undermine the transparency drive. “We are working on this. It will not survive long.” Faking a relocation will not work “A lot of people think it’s enough to have the right to live in the Bahamas. It’s not enough, you have to actually live there. You have to choose somewhere you actually want to be.”
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Pascal Saint-Amans defends CRS despite loopholes identified by Tax Justice Network OECD Response to tax justice network

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5. Economist: OECD will close loopholes early 2017. Others point out that the CRS itself has flaws. It was drafted in a rush, and one expert thinks it would fail to catch 80% of tax-dodging. Financial firms have been calling to report loopholes that could benefit less scrupulous rivals, most of which will be closed before it comes into force or soon after, promises the OECD. (Keeping banks’ compliance costs within reasonable limits means that some will inevitably remain.)