TOKYO -- The world's leading economies will try to outfox tax dodgers by pooling information on offshore bank accounts.
Later this month in Australia, finance ministers and central bank
chiefs from the Group of 20 are expected to agree on such an
arrangement, which officials aim to have in place by the end of next
year.
The proposal would create a common set of rules for
sharing information on bank accounts held by nonresidents in
Organization for Economic Cooperation and Development countries.
Financial institutions would input such data regularly into an online
network accessible to tax authorities, which would gain instant access
to account holders' names, account balances, transactions, and more.
The difficulty of tracking down the people behind offshore accounts has
hampered efforts to combat tax evasion. Existing bilateral tax
agreements have netted a number of hidden troves, including, in 2011,
some 2.5 billion yen (around $30 million) in assets in a Swiss bank,
part of the estate of a top Japanese executive of one of Europe's
premier fashion houses. But with information normally passed between
authorities on CD-ROMs, sometimes only once every two years, the hunt
has been slow.
Until now, if Mrs. Watanabe had $1 million
stashed in a U.S. bank account, Japanese authorities would have been
hard-pressed to find it until the fictional housewife made a transfer.
With the new system, they would be able to see an up-to-date account
balance at the first sign of wrongdoing.
China and other
emerging-market G-20 members are expected to take part in this
arrangement. So is the U.K., which would likely bring the Cayman Islands
and other overseas territories notorious as tax havens within the scope
of the information sharing.
But the new rules would impose
an extra reporting burden on financial institutions. Moreover, some
countries may resist revealing every detail of nonresidents' bank
accounts. How well such a system would work would depend partly on how
many countries took part.
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