The OECD seeks to encourage an environment in which fair competition can take place. In the tax area this means promoting principles that enable each country to apply its own tax laws without interference of practices that undermine the fairness and integrity of each country’s tax system. The OECD does not seek to dictate to any country what its tax rate should be, or how its tax system should be structured.  Instead, it works to build support for fair competition so as to minimise tax induced distortions and to increase taxpayer confidence in the even handed application of tax rules.

With this objective in view, the OECD set out criteria for analyzing preferential regimes and identifying tax havens and has worked since 1998 with both member and non-member economies to address harmful tax practices. The main focus of this work is on improving transparency and exchange of information so that countries can fully and fairly enforce their tax laws. 

Much progress has been made (see progress reports issued in 2000, 2001, and 2004) and today there are 38 jurisdictions that have committed to work with OECD members to improve transparency and to establish effective information exchange. These efforts have led to the development of a Model Agreement on Exchange of Information in Tax Matters which has attracted wide support in other fora such as the G20.  Current efforts are aimed at working towards a level playing field  in the areas of transparency and effective exchange of information.

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