Furthering their efforts to fight against international tax evasion and bank secrecy, members of the Global Forum on Transparency and Exchange of Information for Tax Purposes have issued 9 new peer review reports.
The reports on Hungary, the Philippines, Singapore and Switzerland focus on the legal framework for transparency and exchange of tax information. Those for the Isle of Man, Italy, France, New Zealand and the United States so also cover the exchange of information in practice. More details on each country’s report are provided below.
The reports describe each jurisdiction’s rules for ensuring that information is available, how it can be accessed by competent authorities and the mechanisms in place to exchange the information with foreign tax authorities. They also identify deficiencies and make recommendations on how these jurisdictions can improve their co-operation in international tax matters.
The most common deficiencies identified in the reports relate to: the lack of available information on persons that are represented by nominees and on foreign companies; incomplete accounting information for some forms of limited liability companies and partnerships; slow responses by requested countries.
Jurisdictions follow up on Global Forum recommendations
The majority of the jurisdictions previously reviewed say they have changed their domestic legislation following Global Forum recommendations. Some of the substantial reforms include:
- Belgium passed a law ending bank secrecy for exchange of information purposes;
- The Cayman Island has ensured that offshore entities now have to keep appropriate accounts;
- Ghana has proposed legislation to expand ownership information requirements in relation to companies and trusts; and commenced negotiations to extend its network of information exchange agreements;
- San Marino’s authorities will now be able to access all relevant information for both civil and criminal tax matters; and it has strengthened disclosure obligations relating to beneficial ownership of companies and trusts.
“Countries take the peer-review reports very seriously and they all have pledged to address the deficiencies we identified. In some cases they started to act even before our reports were completed. This shows that peer reviews are working and that we are moving towards a truly level playing field”, said the Chair of the Global Forum, Mike Rawstron of Australia.
An additional 25 peer review reports are set to be completed by November 2011 bringing the number of reviews to about 60 before the G20 Summit in Cannes.
Global Forum membership is growing further
The Global Forum welcomed Colombia, the Former Yugoslav Republic of Macedonia, Georgia, Ghana, and Nigeria as new members, increasing the Global Forum membership to 101 jurisdictions. Another 20 developing countries are expected to join by year end.
“The Global Forum provides a valuable platform for developing countries in combating tax evasion and avoidance through off-shore based schemes”, said John Njiraini, Tax Commissioner in Kenya which joined the Global Forum in 2010.
Responding to a request from the G20, the Global Forum will further develop its technical assistance programme in collaboration with other international organizations, in particular the World Bank.
Background briefing on the Global Forum
Website of the Global Forum: www.oecd.org/tax/transparency
New Exchange of Information Portal: www.eoi-tax.org – Follow the latest news on exchange of information networks and peer reviews for all jurisdictions.
Webcast of the news conference (available shortly after the event)
THE PEER REVIEW REPORTS AT A GLANCE
Reports on the legal framework and on its application (Phase 1 and 2)
France
France has one of the world's largest networks of international exchange of information instruments and exchanges a large volume of information every year. The country has a good legal and regulatory framework, allowing the competent authorities full access to all foreseeably relevant ownership, accounting and banking information. The report recommends improvements to ensure a more timely response to information requests. See EOI Portal page for France: http://www.eoi-tax.org/jurisdictions/FR
Isle of Man
The Isle of Man’s framework for the exchange of information is in place and the tax authorities have a positive relationship with their information exchange partners. The report recommends improvements regarding the availability of accounting information for limited partnerships and notes that the Isle of Man authorities should clarify with partners its practice of disclosing information to other enforcement agencies. See EOI Portal page for Isle of Man: http://www.eoi-tax.org/jurisdictions/IM
Italy
Italy has a very comprehensive legal and regulatory framework ensuring the availability of all types of ownership, accounting and bank information. Its network of exchange of information mechanisms, as well as its revenue authorities’ powers to access information , ensure effective exchange with a large number of jurisdictions. The report recommends that Italy should improve its response times and the time needed to ratify the treaties signed. See EOI Portal page for Italy: http://www.eoi-tax.org/jurisdictions/IT
New Zealand
New Zealand has a strong network of exchange of information agreements and has established sound practices for carrying out information exchange with its partners. Its framework for the availability of ownership, accounting and bank information is generally thorough. However, the report recommends improvements on the requirements relating to nominees and accounting records for liquidated companies. New Zealand’s competent authorities have the power to access information which may be required by its partners. See EOI Portal page for New Zealand: http://www.eoi-tax.org/jurisdictions/NZ
United States
The United States operates an extensive and very active exchange of information program which is well regarded by its peers, though the review recommends that the United States works to speed up its response times. The legal and regulatory framework for the exchange of information in the United States is in place, though some improvement is needed with respect to ownership and accounting information for some limited liability companies with single foreign owners. See EOI Portal page for the United States: http://www.eoi-tax.org/jurisdictions/US
Reports on the legal framework (Phase 1)
Hungary
The peer review of Hungary identifies some deficiencies in its legal framework for the exchange of information and recommends improvements to the availability of information on companies and partnerships and to access of information. Hungary’s Phase 2 review is scheduled for the first half of 2014. See EOI Portal page for Hungary: http://www.eoi-tax.org/jurisdictions/HU
The Philippines
The Philippines has a robust treaty network and has made significant progress in exchange of information, including allowing access to information and ending bank secrecy with its recently passed Exchange of Information Act. Some deficiencies remain in the Philippines’ laws regarding nominees as well as in some of its accounting laws. The report recommends that the Philippines continue to expand its treaty network to ensure that it covers all relevant partners. The Philippines’ Phase 2 review is scheduled for the first half of 2013. See EOI Portal page for the Philippines: http://www.eoi-tax.org/jurisdictions/PH
Singapore
The legal and regulatory framework for the exchange of information is in place in Singapore, but some areas need improvement. The report recommends that Singapore’s competent authority should have the power to obtain all relevant information for all of its exchange partners regardless of whether they need the information for their own tax purposes. The report also recommends improvements in the EOI network to ensure Singapore has agreements to the standard with all relevant partners. Singapore’s Phase 2 review is scheduled for the second half of 2012. See EOI Portal page for Singapore:http://www.eoi-tax.org/jurisdictions/SG
Switzerland
Switzerland’s approach to exchange of information for tax purposes has changed significantly over the past two years. It has made rapid progress to implement its commitment to the internationally agreed standard. However, the report notes that in a few areas it still falls short of the standard: bearer savings books are being phased out but still exist. In addition, only a limited number of Switzerland’s exchange of information agreements meets the standard. Provided it has brought a significant number of its agreements in line with the standard, Switzerland’s Phase 2 review will proceed in the second half of 2012. See EOI Portal page for Switzerland: http://www.eoi-tax.org/jurisdictions/CH
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