ST. PETERSBURG (Reuters) - The leaders of the world’s biggest economies pledged on Friday to help developing nations fight tax evasion by assisting them in tracking funds their citizens hide in tax havens.
The Group of 20 said in a communiqué following a summit in St. Petersburg that it wanted developing countries to sign up to an international convention on the exchange of taxpayer information but acknowledged participating posed logistical and resource challenges for poorer nations.
Under the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, countries will automatically pass information on the financial activities of foreign citizens to the tax authority in those individual’s home nation.
Over 50 countries have signed up, and the communiqué said G20 members would begin to exchange information automatically on tax matters by the end of 2015.
By informing tax authorities about the existence of funds that may not have been previously declared to them, automatic information exchange is expected to highlight previously hard to detect tax evasion.
Most developing nations have not yet signed up to the Convention and the G20 agreed to share expertise with them and to study other ways to help them come on board.
Pascal Saint-Amans, head of tax at the Organisation for Economic Co-operation and Development (OECD), which developed the Convention, said the structures that will facilitate information exchange should also help solve the problem of individuals hiding their interest in murky offshore corporate entities.
The Group of Eight Summit in Northern Ireland in June also discussed measures to reveal the beneficial ownership of tax haven companies.
The G20 backed the OECD action plan on tackling corporate tax avoidance that was published at the G20 Finance ministers meeting in Moscow in July.
Non-governmental groups said they were disappointed the G20 did not give developing countries a formal role in the OECD’s ‘Base Erosion and Profit Shifting’ project.
Writing by Tom Bergin, editing by Mike Peacock