11 Trillion Euros Disclosed as Part of OECD’s Automatic Exchange of Information in 2019
The OECD revealed earlier this week that its automatic exchange of information program or the Common Reporting Standard (CRS) disclosed approximately 11 trillion Euros held in 84 million bank accounts in 100 participating nations.
Compared to 2018, last year witnessed a marked rise in the amount of money disclosed and bank accounts involved. In 2018, 47 million accounts were scoured and 5 trillion Euros declared.
Furthermore, many more countries have been signing onto CRS.
As explained by the OECD, “countries have ramped up global co-operation, first through exchange of information on request and through automatic exchange since 2017, implemented through more than 6,000 bilateral relationships worldwide in 2019 (4,500 in 2018).”
According to Angel Gurriá, the OECD’s Secretary General, “The discovery of previously hidden accounts thanks to automatic exchange of information has and will lead to billions in additional tax revenues.”
Gurriá, who referred to CRS as a “game-changer,” added, “This system of multilateral exchange created by the OECD and managed by the Global Forum is providing countries around the world, including many developing countries, with a wealth of new information, empowering their tax administrations to ensure that offshore accounts are being properly declared.
“Countries are going to raise much needed revenue, especially critical now in light of the current covid-19 crisis, while moving closer to a world where there is nowhere left to hide,” he concluded.
As reported by Christopher Copper-Ind for International Investment, “voluntary disclosure programmes, offshore tax investigations and related measures before the start of automatic exchange in 2017 and since then, have already led to the identification of more than 100 billion euros of additional tax revenues worldwide.”
Furthermore, back in November 2019, the OECD released a study showing the overall impact of CRS on offshore accounts; Copper-Ind explains that CRS led to “a global reduction in foreign-owned bank deposits in international financial centres (IFC) by 24% ($410bn) between 2008 and 2019.”
More specifically, the OECD’s study shows that “a large part of this reduction came in the immediate aftermath of the financial crisis—deposits fell by 13% following the start of the crisis, from the second quarter of 2008 to the second quarter of 2011,” with the drop continuing “since then by a further 11%.”
Additionally, the report states that “the changing financial holdings against the signature of the EOI agreements suggests that tax transparency and EOI playa material role in these changes.”
As explained by Accountancy Daily’s Pat Sweet, CRS requires signatory countries “to exchange financial account information from non-residents obtained from their financial institutions automatically on an annual basis, reducing the possibility for offshore tax evasion.”