Automatic Info Exchange Moves A Step Closer
On October 29, 2014, 51 jurisdictions signed a Multilateral Competent Authority Agreement on the automatic exchange of information that will enable “early adopters” to begin sharing data by September 2017.
The agreement was endorsed by all Organisation for Economic Cooperation and Development (OECD) and G20 countries, as well as by major financial centers participating in the seventh annual meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes. It specifies the details of what information will be exchanged and when, as set out in the Standard for Automatic Exchange of Financial Information in Tax Matters, published in September.
The Standard calls on jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis.
The agreement provides for the exchange of certain account and personal information, consistent with the Common Reporting Standard. All information exchanged will be subject to the confidentiality rules and other safeguards contained in the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
Participating Governments have also agreed that information on the beneficial ownership of all legal entities will be made available to tax authorities and exchanged with treaty partners.
The Global Forum will establish a peer review process to ensure the effective implementation of automatic exchange procedures. A status report on committed and non-committed jurisdictions will be presented to G20 leaders next month, during their annual summit.
It has also invited developing countries to join the move toward automatic exchange, and will offer technical assistance through a series of pilot projects. The African members of the Global Forum will lead an “African Initiative,” to increase awareness of the merits of transparency in Africa.
OECD Secretary-General Angel Gurria said: “We are making concrete progress toward the G20 objective of winning the fight against tax evasion. The fact that so many jurisdictions have agreed today to automatically exchange financial account information shows the significant progress that can occur when the international community works together in a focused and ambitious manner.”
Algirdas Šemeta, the European Union Tax Commissioner, welcomed the signing as “an important joint effort by many in creating a fairer, more appropriate tax environment worldwide.”
He said: “The Global Standard, developed by the OECD in cooperation with G20 countries and the European Commission, will facilitate tax authorities’ access to financial account information and boost worldwide efforts to crack down on tax evasion. This global agreement shows that many countries around the world are ready to work towards alignment with the Global Standard and recognize automatic exchange of information as the new standard for international cooperation.”
“Agreement on a Global Standard is not something we could have foreseen even a few years ago and it signals a new step towards greater tax transparency. I am confident that this move will enable countries around the world to better combat tax evasion and improve the efficiency of their tax collection.”
The full list of signatories is as follows: Albania, Anguilla, Argentina, Aruba, Austria, Belgium, Bermuda, the British Virgin Islands, the Cayman Islands, Colombia, Croatia, Curacao, Cyprus, the Czech Republic, Denmark, Estonia, the Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, the Isle of Man, Italy, Jersey, South Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mauritius, Mexico, Montserrat, the Netherlands, Norway, Poland, Portugal, Romania, San Marino, Slovak Republic, Slovenia, South Africa, Spain, Sweden, the Turks and Caicos Islands, and the UK.