Automatic Tax Information Exchange Agreement

The exchange of information on request was completed by an automatic procedure on 29 October 2014. [2] The automatic process must be based on a common reporting standard. As of May 2020, there are more than 4,000 active bilateral trades in more than 100 jurisdictions committed to the IRS. Three annual automatic scholarships (2017, 2018 and 2019) have already taken place and the next exchanges between these jurisdictions are expected to take place at the end of September 2020. A tieA request for information model has been developed to assist the relevant authorities of TIEA partners in requesting information. It is available in English and French as well as in Spanish, German, Italian, Japanese, Korean and Turkish. The standard provides for an automatic annual exchange of financial account information between governments, including balances, interest, dividends and proceeds from sales of financial assets, which are reported to the governments of financial institutions and include accounts held by individuals and businesses, including trusts and foundations. It defines information on financial accounts to be exchanged, financial institutions to be reported, different types of accounts and registered subjects, as well as the mutual care obligations of financial institutions. The Global Forum will soon begin to examine the practical effectiveness of the implementation of the AIA on the basis of the AIA`s mandate. It will no doubt assess the quality of the information exchanged. However, it is not clear whether the scope of the audit extends to the use of the information received and to the tangible benefits of each legal order. In such a scenario, it will be a waste of taxpayers` money and all the efforts invested in collecting and sending information to other countries without taking advantage of the information obtained. Jurisdictions can also use the text of the articles in the model protocol if they wish to include the automatic and spontaneous exchange of information in a new TIEA.

The standard applies to both individuals and corporations. The information to be provided is as follows: in June 2015, the OECD`s Tax Affairs Committee (CFA) approved a standard protocol on the agreement. The standard protocol can be used by jurisdictions if they wish to extend the scope of their existing TIEAs to the automatic and/or spontaneous exchange of information. States that are no longer bound by bank secrecy would have access to information on demand. Even tax havens without a network of tax treaties have begun to enter into agreements with other countries to allow the exchange of information on demand. Failure to comply with OECD recommendations meant being blacklisted or grey and suffering potentially damaging economic, fiscal and reputational consequences. Data obtained by a court requires a match with the information already available within the tax administration. Whether the court has an information database and whether the computer system and processes are able to identify discrepancies and therefore undisclosed accounts is an important factor.

This problem is undoubtedly a matter of domestic capacity, as it is impossible to manually compare data. The AIA also aims to help developing countries that may not have robust IT systems and may need technical assistance from a partner country that successfully analyzes and exploits information.

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