The notion of a global tax environment is no longer alien.

In fact, it’s a natural response to the growing interconnectedness of global financial markets.

“Cross-border flows of capital degrade our ability to collect tax and, no doubt, make the job more complicated,” said UK-based Richard Hay, tax partner at Stikeman Elliott LLP, at the STEP Canada 14th National Conference, in Toronto.

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The global financial services industry has been attracting a lot of attention from national tax authorities. “It is a very lucrative industry, next to illegal drugs,” said Hay.

Developed countries’ efforts to spotlight taxpayers’ foreign financial assets intensified particularly after the 2008 financial crisis.

Caught in a debt spiral, these countries found it hard to resist an opportunity to improve tax compliance involving foreign financial assets of locals and local financial assets of foreigners.

“[Governments] have shrinking tax collections, we have economies that are struggling, we have loss carryovers from prior years,” said Hay. “We don’t have the engine that generates funding that’s required to sustain government finances.”

This drove governments to take additional measures. FATCA in the U.S., the OECD Convention on Mutual Administrative Assistance in Tax Matters, and amendments to the Extra Statutory Concession by Her Majesty’s Revenue and Customs (HMRC) in the UK are but a few of the 14,000 regulatory announcements made in 2011 alone by governments globally.

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An enormous raft of tax proposals are also in various stages of implementation.

Hay says this dogged pursuit of tax revenue is nothing new for OECD countries. But now, OECD countries are asking emerging nations to give them information to facilitate enhanced tax enforcement.

Today, a number of multilateral programmes that do just that. Some include the EU Savings Tax Directive, Mutual Convention on Tax Assistance among the G-20 nations, Financial Action Task Force, whose 34-member jurisdictions represent most major financial centres.

The controversial Foreign Account Tax Compliance Act (FATCA) is the latest addition. FATCA, like other U.S. tax laws, is applied based on citizenship, not residency, and impacts about seven million American expatriates worldwide, a million of those in Canada.

Under pressure from deteriorating public finances and aging populations, global governments will continue to be aggressive on the tax regulation and enforcement fronts.

Increased scrutiny of wealthy people with international interests is an inevitable by-product of such developments. But for advisors and cross-border tax specialists, this provides an unprecedented opportunity to help their clients with multi-jurisdictional foreign assets.

“Educate your clients on planning and compliance requirements, and expanding [tax] information exchange,” says Hay. “The silver lining in all of this? A deluge of work for professional working in the tax arena.”