Responding to a mandate from G20 leaders to reinforce action against tax avoidance and evasion and inject greater trust and fairness into the international tax system, the OECD on Thur 13.2.2014, unveiled a new single global standard for the automatic exchange of information between tax authorities worldwide.
The standard calls on jurisdictions to obtain information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions that need to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions. The OECD then formally presented the standard for the endorsement of G20 finance ministers during a 22-23 February 2014 meeting in Sydney.
The Standard includes the text of the Model Competent Authority Agreement (CAA) and the Common Reporting and Due Diligence Standard (CRS). The OECD says the CRS will need to be translated into domestic law, whereas the CAA can be executed within existing legal frameworks such as Article 6 of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters or the equivalent of Article 26 in a bilateral tax treaty.
Presenting the new standard, OECD Secretary-General Angel Gurría said: “This is a real game changer. Globalisation of the world’s financial system has made it increasingly simple for people to make, hold and manage investments outside their country of residence. This new standard on automatic exchange of information will ramp up international tax co-operation, putting governments back on a more even footing as they seek to protect the integrity of their tax systems and fight tax evasion.”
The OECD is expected to deliver a detailed Commentary on the new standard, as well as technical solutions to implement the actual information exchanges, during a meeting of G20 finance ministers in September 2014.
[LTN 30, 14/2/14]
OECD revises BEPS project timelines
The timeline of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project is extremely ambitious, with the first outputs expected for September 2014 and the completion of the project by the end of 2015. In December 2013, the OECD published a timetable for planned stakeholders’ input. That timetable has now been revised (as at 20 February 2014) with the dates when discussion drafts will be published and public consultations held in relation to the September 2014 BEPS outputs.
[LTN 35, 21/2/14]