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Mexico fully compliant with OECD tax standards

Tuesday, 12 August, 2014

Mexico has been found ‘compliant’ in a new batch of Organization for Economic Cooperation and Development (OECD) Phase Two Peer Review reports and compliance ratings published on 4 August 2014.

OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes also found Chile, Macedonia, Montserrat and St Kitts and Nevis to be ‘largely compliant’, while Andorra, Anguilla, Antigua and Barbuda, Indonesia and St Lucia were ‘partially compliant’.

Mexico’s positive assessment has led some experts to praise the effort of new president Enrique Peña Nieto, who was elected in late 2012.

According to The Economist, his administration can be credited for liberalising the country’s economy and making big changes in the way it is run thanks to various reforms. Mexico now has the lowest tax take in the OECD as a percentage of GDP.

The Global Forum has completed 143 peer reviews and assigned compliance ratings to 63 jurisdictions that have undergone Phase Two reviews. Of these, 18 were fully compliant.

The first phase of the Forum’s review looks at the quality of a jurisdiction’s legal system and access to information, while the second phase looks at the quality of implementation.

There are still 12 jurisdictions that remain blocked from moving to a Phase Two review, including the supplementary review of Switzerland launched in July to assess changes made since its 2011 review.

Additional peer reviews will be completed by the next plenary meeting of the Global Forum, in Berlin, Germany, on 28-29 October 2014. This meeting is expected to add to the growing momentum towards a much higher level of tax transparency worldwide, after the OECD unveiled last month a new global standard for the automatic exchange of financial information in a bid to ‘put an end to banking secrecy’ in tax matters and increase transparency.

As part of the new standard, governments are urged to obtain detailed account information from financial institutions and share the information automatically with other jurisdictions each year.