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OECD Tax Administrators to Join Forces in Fighting Tax Non-Compliance

Sept. 15, 2006

Tax administration heads from more than 30 countries, meeting in Seoul under the auspices of the Organization for Economic Cooperation and Development's (OECD) Forum on Tax Administration, have agreed to work together on ways to improve tax administration and to address the significant and growing problem of international non-compliance with national tax requirements.

In a summing up speech, the chair of the meeting, U.S. IRS Commissioner Mark W. Everson noted that enforcement of tax laws has become more difficult as trade and capital liberalisation and advances in communications technologies have opened the global marketplace to a wider spectrum of taxpayers. While this more open economic environment is good for business and global growth, it can lead to structures which challenge tax rules, and schemes and arrangements by both domestic and foreign taxpayers to facilitate non-compliance with our national tax laws, he noted.

Participants in the Seoul meeting shared the view that international non-compliance is a significant and growing problem and agreed to improve practical co-operation between revenue bodies and other law enforcement agencies of governments to counter non-compliance. Their discussions also revealed continued concerns about corporate governance and the role of tax advisors and financial and other institutions in relation to non-compliance and the promotion of unacceptable tax minimization arrangements. They also noted the increased flows of capital into private equity funds and the potential issues this may raise for revenue bodies.

Participants in the meeting identified four areas in which they planned to intensify existing work or initiate new work under the auspices of the OECD:

1) Further developing a directory of aggressive tax planning schemes so as to identify trends and measures to counter such schemes.

2) Examining the role of tax intermediaries (e.g., law and accounting firms, other tax advisors and financial institutions) in relation to non-compliance and the promotion of unacceptable tax minimization arrangements with a view to completing a study by the end of 2007.

3) Expanding the OECD 2004 Corporate Governance Guidelines to give greater attention to the linkage between tax and good governance.

4) Improving the training of tax officials on international tax issues, including the secondment of officials from one administration to another.

Read the "Seoul Declaration" (also available in French and Spanish).

For further information, journalists are invited to contact Jeffrey Owens, head of the OECD's Centre for Tax Policy and Administration (tel. + 33 1 45 24 91 08) or Nicholas Bray in the OECD's Media Division (tel. + 33 1 45 24 80 90).

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