Wednesday, July 23, 2014
The Organisation for Economic Cooperation and Development (OECD) on July 21, 2014, released its new global Standard for Automatic Exchange of Financial Account Information in Tax Matters, hailing the move as another important step towards greater tax transparency and the end of banking secrecy.
The new standard calls on governments to obtain detailed account information from their financial institutions and exchange that information annually with other jurisdictions. The standard covers information on balances, interest, dividends, and sales proceeds from financial assets, and covers accounts held by individuals and entities, including trusts and foundations.
The new consolidated version includes commentary and guidance for implementation by governments and financial institutions, detailed model agreements, as well as standards for harmonized technical and information technology solutions, notably a standard format and requirements for secure transmission of data. The OECD will formally present the new standard to G20 finance ministers at their next meeting in Cairns, Australia, on September 20-21, 2014.
More than 65 countries have already publicly committed to implementation, while more than 40 have committed to a specific and ambitious timetable leading to the first automatic information exchanges in 2017, the OECD said. This includes a group of OECD and non-OECD countries that have adhered to the OECD declaration on automatic exchange of information in tax matters as well as a group of early adopters.
The OECD expects more countries to commit to implement the new standard in the run up to the late-October meeting of the Global Forum Transparency and Exchange of Information for Tax Purposes, which brings together more than 120 countries. It will be held in Berlin and hosted by the German Ministry of Finance.
"At this occasion," the OECD said, "a signing ceremony is expected to be held for a new multilateral agreement that activates automatic exchange once legislation and other conditions are in place. Assistance will be available to support less developed countries, so they benefit from this move towards a more transparent tax environment, and international organizations are ready to co-operate to support these countries."
The OECD is also updating a report from 2010 that sets out its policy guidance on voluntary disclosure of income by taxpayers. It has invited public comments until September 12, 2014, on how the framework for voluntary disclosure could be further improved and what particular features might encourage more taxpayers to come forward and take advantage of such programs.