The International Trade and Investment Organisation (ITIO) commissioned a report on ***Assessing the Playing Field – International Cooperation in Tax Information Exchange***. A study was undertaken by Camille Stoll-Davey of Oxford University as a basis for the report, which was published recently by the Commonwealth Secretariat.

ITIO Deputy Chair Malcolm Couch claims the report proves that big countries have no moral or legal edge over small ones. *“It’s time to stop treating small countries with finance centres as different.”* He adds that the results of the study did not come as a surprise given a comparison by the International Monetary Fund a few years back that revealed compliance levels for offshore centres, on average, to be more favourable than those onshore. The report disproves the contention that offshore centres have inferior regulation or standards to onshore ones. It is based on an analysis of objective data compiled by the Organisation for Economic Cooperation and Development. It finds that in key areas such as a willingness to exchange tax information or to identify who is behind companies or trusts, OECD member countries do not operate to a higher standard than OFCs and in some cases they operate to a lower standard.

*”Large countries should stop stigmatising small and developing ones”*, says Mr. Couch. *”There is no factual basis for that approach. Instead, we should all continue to work on a cooperative and fair basis and to participate in the OECD’s Global Tax Forum to help each other tackle criminal and terrorist financing and tax evasion.”*

He argues that the first outcome should be that small countries are fully involved in the creation of new international standards, rather than have these imposed on them by multilateral bodies that large countries control, such as the OECD and the Financial Action Task Force.

In an introduction to the report, Ransford Smith, Deputy Secretary-General of the Commonwealth Secretariat, states: *“The international financial services sector must foster an environment of fair play that takes full account of the interests and vulnerabilities of small developing states. To reduce global inequality, international standard setting exercises need to promote a level playing field and fair competition between small developing countries and large rich nations. The issue of double taxation and tax information exchange agreements needs to be addressed by the development of a methodology that recognises the divergence in tax structures across jurisdictions and allows all countries to utilise the same tools.”*

The report calls on large countries to open up access to the international network of double taxation treaties to small countries, and criticises OECD members for offering small countries “tax information exchange agreements” without mutual benefits.

The ITIO is a forum for small and developing economies and represents countries across Europe, the Caribbean, Latin America, the Pacific and Asia. It works for a level playing field in the trade in services, particularly in the development and implementation of new regulatory standards. This includes, but extends beyond, taxation issues and entails dealing with a wide range of international bodies.