Let's Hope the New OECD Guidelines on Money Laundering Will Not Create More Unnecessary Tax Auditing

Abstract

The Organization for Economic Cooperation and Development (OECD) has just released guidelines to tax administrators and other authorities on what to look out for in uncovering money laundering transactions. Although the guidelines are useful, many authorities will misapply the recommendations in arriving at conclusions that are not supported by fact, simply because a set of facts appear suspicious. Tact and care should be exercised and it should be remembered that, in adversarial systems of law, an accused is only guilty when proven with fact to be guilty, and not by conjecture.

This paper sets out the process which taxpayers should follow when facing a tax audit, especially where the audit is triggered by the tax authority's suspicion emanating from the broad parameters set out in the OECD guidelines.

Keywords: OECD, money laundering, tax audit, tax evasion, offshore ceneters, offshore trusts, discretionary trusts, tax

JEL Classification: K14, K33, K34