Mixed Progress Made on Info Sharing
August 1, 2013 International Tax Cooperation
PARIS – Recent reviews of information sharing protocols around the world have shown vast differences in the success of countries at gathering, holding and sharing data on their taxpayers and registered entities.
On July 31st the Organization for Economic Cooperation and Development (OECD) released a new report on the results and findings of peer reviews into the “…commitment to the international standard for tax information exchange“ of Austria, Bermuda, Brazil, British Virgin Islands, India, Israel, Lithuania, Luxembourg , Malta, Monaco, Qatar, San Marino and The Bahamas.
According to the information in the report, over the last two years Austria has agreed to participate in more information exchange treaties, but it was noted that 52 of the 92 agreements signed by the government are not yet ratified.
Bermuda was also found to have made adequate progress in establishing effective information exchange procedures, however it was shown that a lack of regulatory oversight means that in some cases ownership and accounting information on taxpayers and national entities ay not be held by authorities.
The results of the reviews showed that Brazil generally complies with international tax information exchange standards, but due to a lack of resources the country’s tax authorities are not always able to respond to information requests in a timely manner.
India was found to have implemented adequate measures to ensure that ownership, accounting and bank information is held by authorities, but more work could be done to speed up the processing of information requests.
Israel was deemed to have a number of holes in its tax data collection legislation, specifically when it comes to dealing with information on ownership of bearer shares, and also do not have adequate procedures for compiling financial data on new migrants.
Lithuania has shown reasonable commitment to implementing international information sharing standards, and the competent authorities of the country now have the powers necessary to collect information required by guidelines.
The OECD found that while Luxembourg has the necessary frameworks and legislation to collect and share tax information, the tax authorities have not always exercised those powers upon receipt of requests for information from another country.
The review of Malta showed that the required data collection legislation have now been put in place in the country, but care needs to be taken that the practical implementation of the rules is efficient and effective.
Monaco was found not only to have enacted all appropriate rules for information sharing, but was seen to have effectively and consistently provided the data upon request from another country within a required timeframe.
In the report it was noted that while Qatar has the necessary procedures for sharing information, the relatively small number requests received from other countries mean that authorities have little practical experience in implementing the procedures.
San Marino as deemed to have implemented all required legislation, but was recommended to further monitor the implementation of the rules, as the number of requests for data it will receive in coming years is likely to rise.
The Bahamas were found to have a broad set of powers to collect information relevant for exchanges, but shortfalls in its own data gathering rules mean that authorities may not hold adequate accounting and ownership details.
The British Virgin Islands were found to have inadequate procedures for collection information, and over the last two years a significant number of international requests were incomplete.
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