Google – AFP, Elodie Mazein (AFP), 14 November 2013
 |
French
Economy, Finance and Foreign Trade Minister, Pierre Moscovici
arrives prior to
a Eurozone finance ministers meeting at the EU Headquarters
in Brussels on
November 14, 2013 (AFP/File, John Thys)
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Paris — The
global fight against tax evasion strengthened on Thursday with Liechtenstein
agreeing to join international guidelines on discouraging tax cheats and France
and the US agreeing cooperation.
The US
government shutdown last month delayed France joining up to the US Foreign
Account Tax Compliance Act (FATCA), a fraud fighting weapon aimed at blocking
rich Americans from hiding taxable money abroad.
FATCA
requires foreign financial institutions to report all assets in accounts held
by US citizens to the Internal Revenue Service. French Finance Minister Pierre
Moscovici and US ambassador Charles Rivkin signed the agreement in Paris on
Thursday.
"France
has been an enthusiastic supporter of our effort to promote global tax
transparency and critical to drafting a model of FATCA implementation,"
Robert Stack, US Treasury deputy assistant secretary for international tax
affairs, said in a statement.
"This
agreement demonstrates the growing global momentum behind FATCA and strong
support from the world's most important economies."
Approved by
US Congress in 2010, FATCA enters full implementation in January, after facing
stiff opposition in Switzerland, once a major destination for Americans looking
to hide their fortunes from the tax man.
Under the
policy, international banks are asked to report deposit information from
clients subject to tax in the US or risk a 30 percent levy on revenue.
Ten
countries have now signed the agreement, most taking the option to have banks
and US authorities communicate directly with Japan and Switzerland choosing to
work through governments.
The two
officials said the deal was big step towards fighting tax fraud and fell in
line with goals set out by the G20 group of nations at a summit in September.
At the St.
Petersburg summit, leaders from the world's 20 biggest economies agreed to
begin the automatic exchange of banking information by the end of 2015.
Liechtenstein
meanwhile said it would sign the G20 agreement on fighting tax evasion,
sounding the death-knell for its long ingrained banking secrecy practices.
The tiny
Alpine principality said it would sign the Multilateral Convention on Mutual
Administrative Assistance in Tax Matters "in November 2013".
The small,
landlocked country, cushioned between Switzerland and Austria and long
considered a tax haven, stressed its intent to "participate actively"
with the Organisation for Economic Cooperation and Development in developing
that standard.
At the
instigation of many advanced countries, the Paris-based OECD has spearheaded a
clampdown on tax evasion and the concealment of illicit funds.
The
movement to scrap banking secrecy policies in Liechtenstein and other
well-known "tax havens", such as neighbouring Switzerland, arose after
the financial crisis of 2008 and subsequent eurozone debt crisis, as
cash-strapped countries began going more aggressively after tax evaders and the
banks that helped them.
By signing
the convention, Liechtenstein will join a long list of signatories, including
all G20 members, as well as more than 40 other countries.
In addition
to exchanging information, signatories, which since last month also includes
Switzerland, agree to organise simultaneous checks to track tax fraud.
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