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OECD agreement intensifies fight against tax evasion
Minister of Finance Johan Van Overtveldt has co-signed a multilateralagreement in Paris that will adjust hundreds of tax treaties. “With this agreement, we are taking a vital step towards more tax transparency, a level playing field and more legal certainty,” the Minister explains. “It will allow us to tackle possible shortcomings in international taxation. In this way, we will combat abuse and create security for the business world in one go.”
Belgium has consistently played an active role in the drafting of this OECD agreement, of which approximately 100 countries are part and which encompasses over 1,100 existing bilateral tax treaties. The new agreement aims to provide increased coherence and systematisation for those treaties. Initial changes are already anticipated for the coming year.
Shutting the backdoors
The new OECD agreement empowers governments to shut backdoors in current international tax law. For instance, it will help prevent company profits from disappearing or being artificially shifted to countries with low or even no taxes. It’s for that reason that the agreement also focuses on expanded international cooperation and data exchange. The emphasis in all this is on efficiency. In addition, the agreement offers an opportunity to improve the mediation process between authorities and various parties involved so that taxpayers are left with more legal certainty.
“The Panama Papers, LuxLeaks, SwissLeaks and other revelations in recent years have shown that tax fraud and tax evasion do not stop at a country’s borders. And it’s for this very reason that the fight against this problem must be pursued on an international level as well. Now that the global net is starting to close in on such practices, our own instruments against tax fraud and circumvention will also gain in effectiveness,” Minister Van Overtveldt concludes.