OECD Global Forum on Tax Transparency Highlights Enforcement Initiatives in Annual Report

On December 20, 2017, the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes issued its annual report.

It noted the fact that 50 jurisdictions have committed to starting Automatic Exchange of Information in September 2017 pursuant to the OECD Common Reporting Standard (CRS). As the jurisdictions that participated in the 2017 exchanges are preparing to use the data for enforcement purposes, most of the remaining jurisdictions are preparing now to make their initial exchanges in September 2018. Already the report on the 2017 implementation period is ready. The Global Forum is preparing to conduct full reviews of the implementation of automatic exchange of information (AEOI) by 2020.

The OECD has developed a plan of action to expand AEOI to developing countries.

The Global Forum has finished the first round of peer reviews on exchange of information on request (EOIR). Almost all the jurisdictions have received a satisfactory level of implementation. The GF will now conduct a second round of peer reviews against the 2016 Terms of Reference.

As of November 2017, the number of countries participating in the Multilateral Convention on Assistance in Tax Matters (CAM) reached 115. An additional 11 countries have requested to join.

More than 96% of the jurisdictions that have committed to implement the AEOI Standard also have decided to join the CRS Multilateral Competent Authority Agreement (the CRS MCAA) for putting in place necessary arrangements for exchanging financial account information. Hence, multilateralism on exchange of information is gaining momentum.

The GF’s annual report highlights the progress made in exchange of information and the targets set for 2018.

Clearly, EOIR and AEOI have developed gateways to facilitating the access to financial information by tax authorities. The authorities are increasingly using the data to develop enforcement cases against taxpayers and tax intermediaries.

The January issue of the IELR will have an article on these developments.