On 26-27 October 2012, over 200 delegates from 80 jurisdictions and 10 international organisations and regional groups came together at the fifth meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) in Cape Town, South Africa (Annex 1 provides a list of participants). The Global Forum welcomed the 10 new members which have joined since its last meeting, increasing the membership of the Global Forum to 116 members.

The Global Forum adopted and published a further 9 peer review reports and 3 supplementary reports, representing further progress in the finalisation of the Phase 1 review programme. Accordingly, the Global Forum discussed the expectations and challenges that member jurisdictions will face in the context of the Phase 2 reviews, which assess the practical implementation of the international standard on tax transparency and information exchange.

The Global Forum was also pleased to note the interest shown by a range of jurisdictions in signing the multilateral Convention on Mutual Administrative Assistance in Tax Matters, making it a key instrument for the exchange of tax information to the international standard.

Progress with the Peer Reviews

The Global Forum adopted and published an additional 9 peer review reports. The progress with the peer reviews is also reflected in the Global Forum’s 2012 Annual Report “Tax Transparency, 2012: Report on Progress”, which was adopted by the Global Forum.

After almost three years, most of the members have undergone their Phase 1 review, and the Global Forum has recently launched the first stand-alone Phase 2 reviews, which assess the practical implementation of the international standard on tax transparency and information exchange. Members discussed the expectations and challenges for the Phase 2 reviews. The Global Forum members recognised the significance of Phase 2 reviews, which will eventually lead to ratings of jurisdictions on essential elements and an overall rating, and resolved to ensure that this sensitive exercise was conducted with equity, fairness and in a transparent manner.

Technical Assistance

In response to a call from the G20, the Technical Assistance Coordination Platform was launched in February 2012. This platform, in the form of a secure website, is a tool to enhance coordination between providers of technical assistance in the field of tax transparency and information exchange, notably international organisations and development agencies and the recipient member jurisdictions. The Global Forum noted with satisfaction that the Coordination Platform has raised awareness of its work with these partners, providing them with access to relevant materials and alerting them to upcoming events and training seminars. However, the Coordination Platform has not yet reached its full potential, and all of the Global Forum’s partners agreed that it should be developed further.

In accordance with the guidelines that were adopted at last year’s Global Forum meeting in Paris, the Secretariat reported that over the last year, 58 requests for advisory services were received from 36 member jurisdictions. The Global Forum also welcomed progress in respect of the pilot projects for assistance in Ghana and Kenya, and noted the new requests for project assistance from 9 other member jurisdictions. Recognising the increasing demand for assistance, in particular from its newer members, the international organisations and development agencies were called upon to take the lead in delivering such assistance.

Evaluation exercise

As indicated in its initial mandate, the Global Forum completed an evaluation exercise, which was adopted at the meeting. This exercise concludes that the establishment of a peer review mechanism and subsequent completion of reviews on 88 jurisdictions in three years, is a significant achievement. The output is significant not only in terms of number of reports, but in terms of concrete results which can be clearly identified across a wide range of jurisdictions. Transparency is improving, strict bank secrecy for tax purposes is disappearing and bearer shares are being eliminated or measures put in place to identify their owners. Further, the possibilities for exchanging information have increased dramatically, with more than 800 bilateral information exchange agreements signed since 2009 and more countries signing the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which is now open to a potentially worldwide membership. All of this will have a significant deterrent effect on tax evasion, and in the course of the Phase 2 reviews the Global Forum will examine the practical impact of these changes.

Future direction

At its meeting in Paris in October 2011, Global Forum members agreed to extend the mandate until the end of 2015.

It was agreed that there should be a continuing role for the Global Forum in providing an essential framework for work on transparency and exchange of information for tax purposes. The Global Forum should further develop its monitoring role to ensure that the international standard is applied to the full extent by all jurisdictions. Its core focus should continue to be on the exchange of information. It should examine the Terms of Reference in the light of experience of the peer reviews and as the exchange of information environment continues to evolve. The Steering Group should further develop proposals in the light of the Global Forum’s discussions in Cape Town.

Next Steps

Having considered its programme of work for the coming year, the Global Forum looked forward to the Phase 2 peer reviews, which will be a key focus of the Peer Review Group in 2013, together with the attribution of ratings for more than 50 jurisdictions that will have undergone Phase 2 or combined reviews by the autumn of that year. The Global Forum also recognised the continuing work that needed to be done with respect to the future direction of the Global Forum.

The Global Forum agreed that its next meeting will take place in October-early November 2013, and looks forward to offers by member countries to host the meeting. Finally the Global Forum thanked the government of South Africa for its generous hospitality.

For additional information regarding the main outcomes of the meeting visit the following link.

Official Photo Global Forum on Transparency and Exchange of Information for Tax Purposes