1 information across borders developments in implementing global standards on exchange of...

1

Information across borders

Developments in Implementing Global Standards on

Exchange of Information

CFE ForumThursday 15 April 2010

Brussels, Belgium

By Dónal Godfrey, Head of Unit, Global Forum SecretariatGlobal Forum on Transparency and Exchange of Information for Tax Purposes

Global Forum web site: www.oecd.org/tax/transparency

http://www.oecd.org/tax/transparency

TAX CO-OPERATION –A BRIEF HISTORY

• OECD has worked to improve transparency and exchange of information for many years– 1996 called on by G8 leaders to study the issues– Major report in 1998– Tax haven list in 2000– Model Agreement on Exchange of Information in 2002– Article 26 Update/JAHGA Report 2005– Global Forum (meetings/reports/standards)

CFE Forum / 15 April 2010

THE STANDARDS-WHAT ARE THEY?

• The standards of Transparency and Exchange of Information:1. Availability of information, accounting, bank and

ownership information2. Access to information3. Exchange of information on request, e.g. DTC or TIEA– Standards contained in Model TIEA, Article 26 of

Model DTC and JAHGA Report

3CFE Forum / 15 April 2010

TIEAs Signed Annually 2000 - 2009


WHAT HAPPENED?

• On 2 April 2009 the G20 agreed:

“to take action against non-cooperative jurisdictions, including tax havens. We stand ready to deploy sanctions to protect our public finances and financial systems. The era of banking secrecy is over. We note that the OECD has today published a list of countries assessed by the Global Forum against the international standard for exchange of tax information”


PROGRESS REPORT

• In conjunction with G20 summit OECD Secretariat issued a Progress Report identifying:– Jurisdictions which are currently considered to have

substantially implemented the OECD standard by having concluded at least 12 agreements to the standard;

– Jurisdictions which committed but have not yet substantially implemented the OECD standard; and

– Jurisdictions which have not yet committed to the OECD standard

• Progress Report is updated continuouslyCFE Forum / 15 April 2010

PROGRESS REPORTA PROGRESS REPORT ON THE JURISDICTIONS SURVEYED BY THE OECD GLOBAL

FORUM IN IMPLEMENTING THE INTERNATIONALLY AGREED TAX STANDARD1

Progress made as at 1st April 2010 (Original Progress Report 2nd April 2009)

Jurisdictions that have substantially implemented the internationally agreed tax standard Andorra Anguilla Antigua and Barbuda Argentina Aruba Australia Austria The Bahamas Bahrain Barbados Belgium Bermuda British Virgin Islands Canada Cayman Islands Chile China2

Cyprus

Czech Republic Denmark Estonia Finland France Germany Gibraltar Greece Guernsey Hungary Iceland India Ireland Isle of Man Israel Italy Japan Jersey

Korea Liechtenstein Luxembourg Malaysia Malta Mauritius Mexico Monaco Netherlands Netherlands Antilles New Zealand Norway Poland Portugal Russian Federation St Kitts and Nevis St Vincent and the Grenadines Samoa

San Marino Seychelles Singapore Slovak Republic Slovenia South Africa Spain Sweden Switzerland Turkey Turks and Caicos Islands United Arab Emirates United Kingdom United States US Virgin Islands

Jurisdictions that have committed to the internationally agreed tax standard, but have not

yet substantially implemented

Jurisdiction Year of Commitment

Number of Agreements

Jurisdiction Year of Commitment

Number of Agreements

Tax Havens3 Belize Cook Islands Dominica Grenada Liberia Marshall Islands

2002 2002 2002 2002 2007 2007

(4) (11) (4) (5) (0) (1)

Montserrat Nauru Niue Panama St Lucia Vanuatu

2002 2003 2002 2002 2002 2003

(3) (0) (0) (1) (7) (1)

Other Financial Centres Brunei Costa Rica Guatemala

2009 2009 2009

(9) (1) (0)

Philippines Uruguay

2009 2009

(0) (5)

1. The internationally agreed tax standard, which was developed by the OECD in co-operation with non-OECD countries and which was endorsed by G20 Finance Ministers at their Berlin Meeting in 2004 and by the UN Committee of Experts on International Cooperation in Tax Matters at its October 2008 Meeting, requires exchange of information on request in all tax matters for the administration and enforcement of domestic tax law without regard to a domestic tax interest requirement or bank secrecy for tax purposes. It also provides for extensive safegu ards to protect the confidentiality of the information exchanged.

2. Excluding the Special Administrative Regions, which have committed to implement the internationally agreed tax standard. 3. These jurisdictions were identified in 2000 as meeting the tax haven criteria as described in the 1998 OECD report.

Jurisdictions that have not committed to the internationally agreed tax standard Jurisdiction Number of

Agreements Jurisdiction Number of

Agreements All jurisdictions surveyed by the Global Forum have now committed to the internationally agreed tax

standard

WHAT HAPPENED NEXT?

• All jurisdictions committed to the standards• 25 jurisdictions substantially implemented the

standards since April 2009.• 230 + TIEAs signed since April 2009, 140 in the past

6 months and 140 + DTCs revised or concluded including updated Article 26.

• Reservations to Article 26 by OECD countries and NOEs withdrawn


TIEAs/DTCs Signed with OECD/G20 Countries

9

• More progress in the last year than in 10 years• As stated by the G20 leaders “The era of bank

secrecy (for tax purposes) is over”.• OECD principles on transparency and exchange

of information are almost universally accepted• Result = Nowhere left to hide

A YEAR OF UNPRECEDENTED PROGRESS


NEW CARDS! NEW GAME! NEW FORUM!

• Mexico, September 2009, more than 70 delegations agreed to:– Restructure the OECD Global Forum to expand its

membership – Establish an in-depth peer review process to monitor and

review progress towards full and effective exchange of information

– Identify mechanisms to speed-up the negotiation of agreements and enable developing countries to benefit from the new, more cooperative tax environment.


THE NEW GLOBAL FORUM

• Global Forum established as a Part II program entirely financed by its members

• All members on equal footing• Serviced by self-standing dedicated secretariat in OECD’s

Centre for Tax Policy and Administration• Initial 3 year mandate – to be reviewed after 2 years• Work guided by:

– Steering Group – 15 members– Peer Review Group – 30 members


MEMBERSHIP

• All OECD, G20 and other jurisdictions covered by 2009 Assessment invited as members.

• Other jurisdictions will be invited to participate with possibility of becoming members.

• Relevant international organisations invited as observers.


GLOBAL FORUM-NEW FOCUS- NEW METHOD

• Focus = implementation of the standards

• Method = Peer Review

Not a numbers game - Reviews will examine quality of agreements, relevance of partners and effectiveness of EOI

Impediments to effective EOI will also be identified


PEER REVIEW- Methodology• All 91 Global Forum members have agreed to participate

in the review process. • 2 Phases:

– Phase 1 will focus on legal framework– Phase 2 will focus on practical implementation

(includes an on-site visit).• In February 2010, the Global Forum agreed on the Terms

of Reference, Methodology, Assessment Criteria and Schedule of Reviews.


PEER REVIEW - Methodology

• Reviews will be conducted by assessment teams of at least:– Two Assessors from Global Forum member jurisdictions; and– One member of the Secretariat

• Reports will be drafted by the assessment team.• Jurisdictions will have the opportunity to comment on the

reports• Reports will be presented to the whole Global Forum for

adoption and then published.


PEER REVIEW - Phase 1 (Legal Framework)

• The Terms of Reference divides the standards into 10 essential elements. Phase 1 reviews lead to a determination for each of these:– The element is in place.– The element is in place, but certain aspects of the legal implementation of the

element need improvement.– The element is not in place.

• If crucial elements are not in place, a jurisdiction will not move to Phase 2 until it has improved its legal and regulatory framework.


PEER REVIEW – Phase 2 (Implementation)

• Each element will be rated:– Compliant (C): In practice, the element is fully implemented.– Largely Compliant (LC): There are only minor shortcomings in the

implementation of the essential element.– Partially Compliant (PC): The essential element is only partly

implemented.– Non-Compliant (NC): There are substantial shortcomings in the

implementation of the essential element.

• Phase 2 evaluation will also include an overall rating of (C), (LC), (PC) or (NC).


PEER REVIEW SCHEDULE

• First tranche of 20 reviews launched on 1 March 2010 • The second tranche of reviews (20 more) will begin in

the second half of 2010• All Phase 1 reviews will concluded by 1st half of 2012

and Phase 2 by 2014• Some jurisdictions have combined Phase 1-2 review

(long standing commitment to standards, adequate treaty network and EOI history)


NEW GLOBAL FORUM -Speed-up Mechanisms

• COE/OECD Convention on Mutual Administrative Assistance in Tax Matters

• OECD Multilateral TIEA

• Multilateral Negotiations


OUT WITH THE OLD – IN WITH THE NEW

• “Era of bank secrecy is over” • A new era of transparency has begun• All country support – Progress Report has no

uncommitted jurisdictions• Change has happened (25 jurisdictions moved to

“substantially implemented” category)• Others are also moving, e.g. Cook Islands 11 agreements• Peer reviews will ensure implementation


MORE INFORMATION

Global Forum on Transparency and Exchange of Information for Tax Purposes

www.oecd.org/tax/transparency and

Centre for Tax Policy and Administration work on Tax Evasion

www.oecd.org/tax/evasion.

22

http://www.oecd.org/tax/transparency

http://www.oecd.org/tax/evasion

1 information across borders developments in implementing global standards on exchange of...

Documents

new forum

oecd global forum

continuouslycfe forum

new global forumglobal

noes withdrawncfe forum

oecd countries

global standards

oecd standardprogress