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Towards Anti Tax Evasion (ATE) standards

As I explained the OECD framework to counter tax evasion is not relevant and jurisdictions that are used for tax evasion do not want the review of the criteria.

It is a general principle that citizens pay the taxes where they live to contribute to the financing to the public policies and in international law there are assistance rules, which implies in tax matters communication of data relating to foreign citizens.

The protection of private life is limited to the actual residents of a given jurisdiction: in other words, banking secrecy to protect private life is fine for Luxembourg (or Swiss or any other) residents living in Luxembourg (or Switzerland or any jurisdiction for its residents), but it is not opposable to the tax administration of foreign citizens living in their country.

Banking secrecy is actually a tool for tax evasion as in most cases queries from foreign tax administration will not be satisfied despite the OECD tax model that requires accurate queries.

That is the reason why some people advocate for the automatic exchange.

There is a pragmatic way to fix the issue: there are international standards against AML-CFT that are taken into account in the procedures and codes of conduct of firms, and especially KYC. Why not enacting and enforcing Anti Tax Evasion (ATE) standards with a criminal liability for bankers help help to commit evasion?

There is no need for an international agreement at the OECD for that purpose.

Even though the enforcement of AML-CFT laws and regulations is dubious in some jurisdictions (for example in Luxembourg, according to the US Department of State, the scarce number of financial criminal cases is of concern, particularly for a country that has such a large financial sector: but it is true that, according to the Luxembourg FIU, 60% of banks never report any suspicious transaction. There are as well little declarations of suspicion from auditors whose commercial relationship with their auditees is emphasized and personalized by the small size of the jurisdiction… This would be evidence of the good faith of politicians and professionals, when they state their jurisdiction is no a tax haven and that banking secrecy has nothing to do with tax evasion.

14:51 Posted in Luxembourg | Permalink | Comments (0)

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