China on Tuesday signed the multilateral convention on mutual administrative assistance in tax matters to boost its participation in global efforts to combat tax avoidance and evasion by cooperating with other states in the assessment and collection of taxes.
Wang Jun, Administrator of the State Administration of Taxation of China, signed the convention on behalf of the Chinese government, in the presence of Angel Gurria, Secretary-General of the OECD, at the headquarters of the OECD in Paris.
By signing the Convention, China became the 56th signatory to the multilateral agreement designed to facilitate international cooperation among tax authorities to improve their ability to tackle tax evasion and avoidance and ensure full implementation of their national tax laws, while respecting the fundamental rights of taxpayers.
"This is the first multilateral tax instrument that has ever been signed by China," Chinese Administer Wang Jun told the audience at the signing ceremony.
He said the signing of the convention is of significance as it comes at a time when China has begun economic transition, marking a new step in opening-up and reform in tax matters.
Hailing China's participation in the convention, OECD chief Gurria said: "Today's signing is both timely and important. The G20 has endorsed automatic exchange of information as the new global standard. This also represents another significant step in the strengthening of collaboration between China and the OECD."
He added the convention provided the ideal instrument "to swiftly implement automatic exchange, and to do so with a wide range of partners."
Developed by the OECD and the Council of Europe in 1988, the convention on mutual administrative assistance in tax matters is the most comprehensive multilateral instrument available for tax cooperation and exchange of information.
In response to the global financial crisis in 2008, the international community has strengthened the fight against tax evasion and fraud.
In 2009, the G20 emphasized the need to tackle tax evasion. In response, the OECD and the Council of Europe made a change in 2010 to the convention to align with the international standard on exchange of information and open to all the world.
The convention has now taken on increasing importance with the G20's recent call for automatic exchange of information to become the new international tax standard of exchange of information. The OECD and G20 are working together to develop the operational platform for the new single global standard for automatic exchange of information which has been endorsed by the G20.
So far, according to OECD sources, over 60 countries, including all G20 members, have either signed or expressed interest in signing the convention.