1 information across borders developments in implementing global standards on exchange of...
TRANSCRIPT
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
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
4CFE Forum / 15 April 2010
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”
CFE Forum / 15 April 2010
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
CFE Forum / 15 April 2010
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
CFE Forum / 15 April 2010
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.
CFE Forum / 15 April 2010
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
CFE Forum / 15 April 2010
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.
CFE Forum / 15 April 2010
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
CFE Forum / 15 April 2010
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.
CFE Forum / 15 April 2010
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.
CFE Forum / 15 April 2010
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.
CFE Forum / 15 April 2010
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).
CFE Forum / 15 April 2010
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)
CFE Forum / 15 April 2010
NEW GLOBAL FORUM -Speed-up Mechanisms
• COE/OECD Convention on Mutual Administrative Assistance in Tax Matters
• OECD Multilateral TIEA
• Multilateral Negotiations
CFE Forum / 15 April 2010
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
21CFE Forum / 15 April 2010
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