A brief history of tax

transparency

David James

Tax transparency – the future for tax administrations

Tax administrations are working in an

increasingly digital and globally

mobile world

There has been a sea change in

public opinion on offshore tax

evasion and a demand for those

cheating the system to be

brought to account

Changes in approach to

compliance using transparency are

part of the response to

these changes

2000s

Banking secrecy

34 TIEAs

Multilateral Convention adopted by

11 jurisdictions

No model TIEA

23 year old Mutual

Assistance Directive

In The beginning

Now…

CRS & BEPS

130+ agreed treaties covering

exchange of tax information

Rising number of Multilateral

exchange agreements for

AEoI

OECD model DTS and TIEA

2011 Directive on

Administrative Assistance in Tax Matters

Tools Increasing

2008 Onwards – banking scandals

Swiss bank UBS found to have lured US based customers into investing assets into accounts to evade tax and hide wealth

•Led to partial revelations to the IRS on the holders of such accounts

2010 HSBC found to have helped customers to evade tax

through use of offshore accounts

FATCA and the Common Reporting Standard

Financial Accounts Tax Compliance Act – the US response

• Into force in 2012

• Required financial institutions worldwide to report to the IRS US residents and citizens with accounts in other jurisdictions

• UK – US Intergovernmental agreement signed

• First reporting 2015

Common Reporting Standard

• OECD and G20 led agreements for the automatic exchange of financial accounts data

• 101 jurisdictions

• Came into force 2016 with the first exchanges in 2017

Exchange of tax Rulings

OECD initiative

BEPS actions to prevent harmful tax practices

Exchange of tax rulings between tax administrations

BEPS Action 5 exchanges and under the DAC for EU Member States

The exchanges vary under each

Country By Country Reporting

OECD initiative

Transparency around where a multinational

groups generate

profits

Use in risk assessment,

transfer pricing, CFC

and DPT reviews

Groups with turnover above

€750m

UK headed groups report

to HMRC

Data shared with other relevant

jurisdictions

Receive data on non-UK

headed groups with activities

in the UK

Followed the Panama Papers reports

UK already had plans to publish lists beneficial owners of companies, partnerships, trusts and similar structures

Mechanisms for exchange under review

45 jurisdictions have committed to exchange

Beneficial Ownership