The U.S. and Monaco have signed a tax information exchange agreement to allow the two countries to share information on tax matters, including bank accounts used to stash money abroad.
This administration is wholeheartedly committed to combating offshore tax evasion, said Deputy Treasury Secretary Neal Wolin in a statement. We are working with countries like Monaco to ensure that the IRS has access to the information that it needs to enforce U.S. tax law. Todays agreement serves as an example for other financial centers around the world and reflects our continued efforts to end the use of offshore accounts as a tool for tax evasion.
The U.S. has been cracking down on the use of secret bank accounts in tax haven countries, in part through agreements with traditional tax havens such as Switzerland, Liechtenstein and the tiny principality of Monaco.
The Tax Information Exchange Agreement with Monaco will provide the U.S. with access to information it needs to enforce U.S. tax laws, including information related to bank accounts in Monaco. The TIEA will permit the U.S. to seek information from Monaco, beginning in 2010, on all types of taxes in both civil and criminal matters regarding 2009 and later tax years. As with other such agreements, only specific tax authorities will be allowed to receive and send information. Information exchanged pursuant to the TIEA may be used only for tax purposes, and the tax authorities must safeguard the confidentiality of information exchanged pursuant to the TIEA.
The U.S. has been trying to close the estimated $290 billion tax gap in part by going after the unreported foreign income and assets of U.S. taxpayers. At the recent G-20 Leaders' Summit in London, the U.S. strongly supported efforts to ensure that all countries adhere to international standards for exchange of tax information. In its fiscal 2010 budget, the Obama administration delivered a detailed reform agenda to reduce the amount of taxes lost through unintended loopholes and the illegal use of hidden accounts by well-off individuals. The Treasury Department has concluded Gibraltar's first-ever tax information exchange agreement and has also concluded an agreement with Luxembourg to provide for greater exchange of tax information. In June, the Treasury Department announced an agreement with Switzerland to amend the U.S.-Switzerland income tax treaty to provide for increased tax information exchange.
To view the full text of the agreement with Monaco, click here.
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