TAX PLAN FACES COLLAPSE
Times (European edition, FRONT PAGE)
Andrew Parker, Financial Correspondent
flagship global initiative by leading industrialised
countries to crack down on tax evasion is in danger
countries of the Organisation for Economic Co-operation
and Development, have failed to reach agreement on
a key element of the initiative they will be discussing
with representatives of offshore tax havens in Ottowa
and Luxembourg have objected to proposals for improved
access to bank infor-mation which leading OECD members,
including the US and the UK, say is crucial to the
fight against money-laundering and tax evasion.
split among OECD members is threatening to undermine
the organisation's efforts to persuade tax havens
to stick with the initiative.
the September meeting of the OECD's governing council,
Switzerland and Luxembourg blocked agreement on a
common definition of tax fraud that could apply when
exchanging bank information between nations.
also objected, together with Austria and Belgium,
to a deadline of December 2005 for access to bank
information for verification of residents' tax liabilities.
and Luxembourg are believed to have demanded more
time to eradicate harmful tax practices identified
by the OECD - which should have been abolished by
federal department of finance said it could not support
the proposals at the OECD meeting last month because
they clashed with national laws and the European Union
savings tax directive. Luxembourg's ministry of
finance also said it could not support the proposals
because they contradicted the EU directive.
OECD initiative has been damaged by the EU's decision
in June not to insist on a commitment from Austria,
Belgium and Luxembourg to exchange information about
non-residents' savings income from 2005.
Forbes, chairman of the International Trade and Investment
Organisation, which represents offshore centres, said:
"The OECD has praised our co-operation but
is sadly unable to deliver its own key members.
meeting] will need to consider whether to take
the OECD's road or the EU's or whether to make no
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