Banking on fair tax

The financial crisis might not have been caused by taxation, but it nonetheless raises concerns about evasion, compliance and transparency in financial markets. The OECD Observer asked South Africa's minister of finance, Pravin Gordhan, who chairs the OECD's Forum on Tax Administration, to explain.

OECD Observer: What particular challenges do banks present for tax authorities?

Pravin Gordhan: There are a few. Take for instance the complexity of some transactions undertaken by banks or the financial products developed by banks for their customers. This often makes it difficult for revenue bodies to differentiate between aggressive tax planning transactions and transactions that are merely complex but do not contain any significant tax uncertainty. Add to this the fact that banks operate on a global level, which means many of their transactions, or transactions facilitated for their clients, have tax impacts in more than one country. This makes it difficult to understand the overall context of a transaction and can also cause delay in arriving at a decision on the correct tax outcome.

The OECD's Forum on Tax Administration recently approved a study on building transparent tax compliance among banks. What are the main messages from the study?

The aim is to enable tax administrations to appreciate fully the commercial and international context of the complex financial transactions used by banks and their clients. So we encourage banks to offer a degree of transparency above the minimum required under existing tax laws. By obtaining information at an early stage, tax administrations can respond to emerging risks and ensure that their resources are targeted effectively. This minimises compliance costs for banks. Tax administrations can also work together more effectively. By sharing information internationally, they can better respond to emerging aggressive tax planning as well as reduce the time taken to provide greater certainty to banks on transactions involving multiple jurisdictions.

Why did the OECD commission the report?

Unacceptable tax minimisation arrangements are one of the major risks that all countries need to manage. The role of tax advisors and financial and other institutions in promoting these arrangements has been a particular concern of ours for a few years now. The Forum on Tax Administration committed to examining the role of tax intermediaries in relation to noncompliance and the promotion of aggressive tax planning in 2006. This latest report on the role of banks in designing and implementing aggressive tax planning is the follow-up.

The financial crisis developed as the study was being undertaken. What effect did the crisis have on the study's recommendations?

Though the report was not about the financial crisis, it was necessary to take it into consideration. Neither tax policies nor tax administrations appear to have been major influences on events or behaviours which led to it. However, clearly the crisis presents an opportunity for revenue bodies to work with other financial regulators to improve transparency and tax compliance. This is an important recommendation in the report and one that is part of strengthening the overall corporate governance framework.

©OECD Observer No 273 June 2009



OECD (2009), Building Transparent Tax Compliance by Banks, CTP, Paris.

OECD (2006), Study into the Role of Tax Intermediaries, CTP, Paris.




Economic data


Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive print editions delivered to you directly

Online edition
Previous editions

Don't miss

  • Africa's cities at the forefront of progress: Africa is urbanising at a historically rapid pace coupled with an unprecedented demographic boom. By 2050, about 56% of Africans are expected to live in cities. This poses major policy challenges, but make no mistake: Africa’s cities and towns are engines of progress that, if harnessed correctly, can fuel the entire continent’s sustainable development.
  • “Nizip” refugee camp visit
    July 2016: OECD Secretary-General Angel Gurría visits the “Nizip” refugee camp, situated between Gaziantep and the Turkish-Syrian border, accompanied by Turkey’s Deputy Prime Minister Mehmet Şimşek. The camp accommodates a small number of the 2.75 million Syrians currently registered in Turkey, mostly outside the camps. In his tour of the camp, Mr Gurría visits a school, speaks with refugees and gives a short interview.
  • OECD Observer i-Sheet Series: OECD Observer i-Sheets are smart contents pages on major issues and events. Use them to find current or recent articles, video, books and working papers. To browse on paper and read on line, or simply download.
  • Queen Maxima of the Netherlands gives a speech next to Mexico's President Enrique Pena Nieto (not pictured) during the International Forum of Financial Inclusion at the National Palace in Mexico City, Mexico June 21, 2016.
  • How sustainable is the ocean as a source of economic development? The Ocean Economy in 2030 examines the risks and uncertainties surrounding the future development of ocean industries, the innovations required in science and technology to support their progress, their potential contribution to green growth and some of the implications for ocean management.
  • OECD Environment Director Simon Upton presented a talk at Imperial College London on 21 April 2016. With the world awash in surplus oil and prices languishing around US$40 per barrel, how can governments step up efforts to transform the world’s energy systems in line with the Paris Agreement?
  • Happy 10th birthday to Twitter. This 2008 OECD Observer interview with Henry Copeland said you’d do well.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • Once migrants reach Europe, countries face integration challenge: OECD's Thomas Liebig speaks to NPR's Audie Cornish.

  • Message from the International Space Station to COP21

  • The carbon clock is ticking: OECD’s Gurría on CNBC

  • If we want to reach zero net emissions by the end of the century, we must align our policies for a low-carbon economy, put a price on carbon everywhere, spend less subsidising fossil fuels and invest more in clean energy. OECD at #COP21 – OECD statement for #COP21
  • They are green and local --It’s a new generation of entrepreneurs in Kenya with big dreams of sustainable energy and the drive to see their innovative technologies throughout Africa.
  • Pole to Paris Project
  • In order to face global warming, Asia needs at least $40 billion per year, derived from both the public and private sector. Read how to bridge the climate financing gap on the Asian Bank of Development's website.
  • How can cities fight climate change?
    Discover projects in Denmark, Canada, Australia, Japan and Mexico.
  • Climate: What's changed, what hasn't, what we can do about it.
    Lecture by OECD Secretary-General Angel Gurría, hosted by the London School of Economics and Aviva Investors in association with ClimateWise, London, UK, 3 July 2015.
  • Is technological progress slowing down? Is it speeding up? At the OECD, we believe the research from our Future of ‪Productivity‬ project helps to resolve this paradox.
  • Is inequality bad for growth? That redistribution boosts economies is not established by the evidence says FT economics editor Chris Giles. Read more on
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .

Most Popular Articles


What issue are you most concerned about in 2016?

Euro crisis
International conflict
Global warming

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2016