HAVING REGARD to Article 5 b) of the Convention on the Organisation for Economic Co-operation and Development of 14 December 1960;

CONSIDERING that tax avoidance and evasion are contrary to fiscal equity, have serious budgetary effects and distort international competition;

NOTING that tax avoidance and evasion schemes involving international transactions have become increasingly complex and more difficult to detect;

CONSIDERING that effective action against such schemes requires strengthened co-operation between OECD Member countries;

I.          RECOMMENDS Governments of Member countries:

a)     To strengthen, where necessary, their legal, regulatory or administrative provisions and their powers of investigation for the detection and prevention of tax avoidance and evasion, with regard to both their domestic and international aspects, and to exchange experiences with respect to such action;

b)    To facilitate, improve and extend exchanges of information between their national tax administrations, with a view to combatting tax avoidance and evasion, notably by making more intensive use of international conventions or instruments in force and by seeking new arrangements of a bilateral or multilateral character, with due regard to the provision of adequate safeguards for taxpayers;

c)     To exchange experiences on a continuing basis on tax avoidance and evasion practices, on techniques for detecting and preventing them and on ways and means of improving tax compliance in general.

II.         INSTRUCTS the Committee on Fiscal Affairs to pursue its work with a view to facilitating the achievement of the above aims and to submit to the Council, as appropriate, specific proposals for increased co-operation between Member countries in this field.