On 5 July 2018, the OECD published a new set of bilateral exchange relationships, established under the Common Reporting Standard Multilateral Competent Authority Agreement (CRS MCAA).
In total, the international legal network, for the automatic exchange of offshore financial account information, under the CRS now covers over 90 jurisdictions, with the remaining dozen set to follow suit over summer.
The network will allow over 100 committed jurisdictions to exchange this (Common Standard) information, in September 2018, under more than 3200 bilateral relationships that are now in place – an increase of over 500 since April of this year.
The full list of automatic exchange relationships* that are currently in place under the CRS MCAA is available online.
The last two months have also been marked by a significant increase of jurisdictions participating in the multilateral Convention on Mutual Administrative Assistance in Tax Matters, which is the prime international instrument, for all forms of exchange of information in tax matters, including the exchange upon request, as well as the automatic exchange of CRS information and Country-by-Country Reports.
Since early May, the Former Yugoslav Republic of Macedonia, Grenada, Hong Kong (China), Liberia, Macau (China), Paraguay and Vanuatu have joined the Convention, bringing the total number of participating jurisdictions to 124. In addition, The Bahamas, Bahrain, Grenada, Peru and the United Arab Emirates have deposited their instruments of ratification.
These recent developments show that jurisdictions are now completing the final steps for being able to commence CRS exchanges by September 2018, therewith delivering on their commitment made at the level of the G20 and the Global Forum.
[Whilst this all sounds very progressive and potent for international tax administration, we need to remember that not all countries have a legal system, a non-corrupt ethic and longstanding free press (committed to exposing wrongdoing) such as Australia. Australia can be trusted, we would hope, with information that is secret in the home jurisdiction. But how many of the countries, to which Australia is automatically transferring otherwise secret information, can be trusted to keep that information secret and/or not abuse it – say for private or criminal gain in the recipient jurisdiction – through corrupt administrators, or even well meaning ‘whistleblowers’? This is potentially a serious problem and I am not sure what protections there are – if any.]
Comprehension questions (answers available)
- Is the information exchanged under the CRS ‘offshore account information’?
- Is the information exchanged under ‘bilateral agreements’?
- Is there a Convention that co-ordinates the information to be exchanged?
- Is the news item, that the OECD has published a new list of bilateral exchange agreements?
- Are there 500 bilateral agreements – a number which has increased by over 100, since April 2018?
- Have Bahamas, Bahrain, Grenada, Peru and the United Arab Emirates just joined the Convention?
- Have Former Yugoslav Republic of Macedonia, Grenada, Hong Kong (China), Liberia, Macau (China), Paraguay and Vanuatu, just deposited instruments, under the Convention?