India: OECD seems to warm to multilateral, automatic information exchange
Recent news from India, however, we feel is worth noting now. Jeffrey Owens, Director, Centre for Tax Policy and Administration, OECD, together with other senior OECD officials, met on Dec 7 with India's Finance Minister, Mr Pranab Mukherjee and his top officials.The Hindu BusinessLine reported, in Tax convention: OECD wants India to speed up ratification:
The OECD, a grouping of wealthy nations, hopes that India would go in for quick ratification of the Multilateral Convention on mutual administrative assistance in tax matters—a multilateral agreement that is now being seen as the ‘gold standard’ for co-operation in tax administration.
G20 countries are moving from bilateral to multilateral agreements. At the recent G20 leaders summit at Cannes, India had along with 12 other G20 countries associated with this convention. India has already signed a letter of intent and now quick ratification is required, Mr Owens told Businessline here today.
We disagree that the Multilateral Convention is a "gold standard". We can view the Multilateral Convention as a step forward in that the OECD is now publicly acknowledging that a patchwork of bilateral agreements is ineffective, and that an approach that is multilateral in nature is essential for an effective fight against tax dodging by the wealthy in secrecy jurisdictions. (After all, as we pointed out in our analysis of the UK-Swiss tax deal: some of the major flaws in the deal are quite simply impossible to fix without a multilateral approach.) As The Hindu BusinessLine cites:
In a global economy, where high networth individuals and multinational enterprises operate in many jurisdictions, it is now being recognised that bilateral agreements may be inadequate to address multilateral issues, Mr Owens pointed out.
So, Jeffrey Owens of the OECD has said that bilateral agreements may be inadequate, a point that TJN has been asserting (in more forceful terms) all along. Click here for a suggested response to Mr. Owen's statement (no religious bias intended).