Sep 1, 2006 12:00 PM, By Richard J. Hay, tax partner and head, Private Capital Group, Stikeman Elliott, LLP London

By: By Richard J. Hay, tax partner and head, Private Capital Group, Stikeman Elliott, LLP London

The Organisation for Economic Co-operation and Development (OECD) has released a seminal report on tax information collection and exchange practices in 82 countries. The principal achievement of this long-awaited report, Tax-Cooperation — Towards a Level Playing Field,¹ is 200 pages of tables reviewing and effectively comparing information collection and exchange practices in countries ranging from Switzerland to the Cayman Islands to the United States. This data is highly informative for anyone seeking a summary view of a jurisdiction's position on confidentiality (or “transparency,” depending on one's perspective) of client financial records.²

The report is part of an ambitious OECD program seeking global data tracking and exchange to improve tax enforcement for its members. But it fails to tackle two major obstacles that may doom the OECD's efforts. First: non-OECD member countries lack incentives to shoulder onerous and expensive burdens in the interests of conferring benefits exclusively to high-tax countries.³ Second: large OECD members such as Switzerland and the United States have been reluctant to take the medicine that the OECD prescribes. The report nods in the direction of these roadblocks — then sidesteps them. There's no real discussion and certainly no suggestions for solutions.

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