The tax noose tightens

The Organisation for Economic Cooperation and Development (OECD) is losing patience with jurisdictions that refuse to ‘play the taxation game’ by its rules, writes Andrew Watt of Alvarez & Marsal.

Andrew Watt is a Managing Director with Alvarez & Marsal in London. He may be contacted on tel: +44 (0) 207 715 5200, email: awatt@alvarezandmarsal.com; www.alvarezandmarsal.com

This mood of exasperation was neatly summed up in comments made at a conference sponsored by France and Germany in October of this year and attended by some 17 OECD members, including the UK. The OECD secretary-general estimated funds held in tax haven accounts to be somewhere in the region of UK£3-4 trillion (US$5-7 trillion). The German Finance Minister Peer Steinbruck, who, earlier this year, pledged ‘to tighten the thumbscrews on Liechtenstein’ said that Switzerland’s investment decisions encouraged some German taxpayers to commit tax fraud and he would invite the OECD to add Switzerland to its list of uncooperative tax havens. The French budget minister said it was time to take action against jurisdictions whose banking systems were opaque and clouded in secrecy.