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Luxembourg faulted for not helping find tax cheats

Published on 31/07/2013

The global forum charged with cracking down on tax havens said Wednesday it found that Luxembourg was not fully meeting international standards in helping other countries seeking to find tax cheats.

The Global Forum on Transparency and Exchange of Information for Tax Purposes, which operates under the auspices of the Organization for Economic Cooperation and Development, said a review had found that Luxembourg had not always fully used its legal powers to provide requested data.

“Luxembourg has not used its information gathering and enforcement powers to obtain requested information in all instances,” the Forum said in a statement.

“Despite these deficiencies, Luxembourg does exchange a considerable amount of information and does so in a timely manner,” it added.

Luxembourg, which has an outsize banking sector, has been a holdout in the automatic exchange of banking information between EU countries for tax purposes.

Austria, another country which has also opposed the automatic exchange of banking information, is in a legal position to exchange information at international standards with less than half of its 90 treaty partners, the Forum found.

The review of practices of 11 countries also found that while Bermuda and the Bahamas were responsive to requests for information, a lack of monitoring meant that some information on companies was not available.

The review found however that the British Virgin Islands experienced some difficulties, with many responses incomplete.

“This was largely because no clear organisational process was in place, resulting in the Virgin Islands not using its access powers effectively. In particular accounting information was not obtained or exchanged in many cases,” the Forum said.

The British Virgin Islands has conducted a reorganisation since the review was completed last year.