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Automatic information exchange has cut IFCs' bank deposits by 25 per cent, says OECD

Monday, 10 June, 2019

Bank deposits held in 40 key international financial centres by companies and individuals have fallen by 34 per cent from their 2008 peak of USD1.6 trillion, says the OECD.

Some two-thirds of the USD551-billion drop is due to the onset of automatic exchange of information (AEOI) under the OECD's Common Reporting Standard (CRS), according to preliminary OECD data presented to last week's meeting of G20 nations' finance ministers. More than 90 jurisdictions participating in AEOI since 2018 have now exchanged information on 47 million offshore accounts, with a total value of around EUR4.9 trillion. The OECD says that, since 2008, bank deposits held in IFCs have fallen by 20 to 25 per cent solely because of AEOI.

Moreover, the knowledge that automatic exchange was on the way - often backed by governments' offers of limited-period tax amnesties - prompted many taxpayers to voluntarily disclose their offshore accounts in the years leading up to 2018. 'Voluntary disclosure of offshore accounts, financial assets and income in the run-up to full implementation ... resulted in more than EUR95 billion in additional tax, interest and penalties for OECD and G20 countries over the 2009-2019 period', said the OECD. The vast part of this was disclosed before July 2018, reflecting the actions of national tax authorities in imposing more severe non-compliance penalties on those taxpayers who had not come forward by the time large-scale data exchanges began in September last year.

'The transparency initiatives we have designed and implemented through the G20 have uncovered a deep pool of offshore funds that can now be effectively taxed by authorities worldwide', commented OECD secretary-general Angel Gurria.

The OECD's complete study is expected to be published later this year.

Sources