Germany takes aim at tax havens

23rd April 2009, Comments 0 comments

Earlier in April, world leaders pledged at a Group of 20 summit in London to crack down on tax havens and tasked the Organisation for Economic Co-operation and Development to draw up a list of countries that did not adhere to international tax reporting standards.

Berlin -- Germany agreed a draft law Wednesday aimed at cracking down on tax dodgers and clamping down on those doing business with tax havens abroad.

According to the draft legislation, drawn up in a cabinet meeting after weeks of wrangling within Germany's uneasy "grand coalition," people earning over 500,000 euros (647,000 dollars) annually will have to keep tax documents for six years.

Moreover, individuals and businesses parking capital in countries that do not respect international rules could see tax advantages withdrawn, according to the draft obtained by AFP.

"The recent cross-border tax evasion scandals have demonstrated ... the threat posed by the massive loss in tax receipts," the draft said.

Earlier in April, world leaders pledged at a Group of 20 summit in London to crack down on tax havens and tasked the Organisation for Economic Co-operation and Development (OECD) to draw up a list of countries that did not adhere to international tax reporting standards.

Several countries have since bowed to international pressure and opened up their books.

Germany's draft law must still be approved by the Bundestag, the country's parliament, and followed a long-running campaign by Finance Minister Peer Steinbrueck to clamp down on tax evasion and tax havens.

AFP/Expatica

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