Thursday, January 07, 2010

Automatic information exchange is the emerging standard - II

Many people believe that the OECD's deeply flawed standards of information exchange between jurisdictions (where information is exchanged merely "on request" rather than automatically) are, as the OECD likes to put it, "the internationally accepted standard" for information exchange. As we have already pointed out, this is far from being the case.

We have now conducted some more research on this issue, and we have put this into a detailed Memorandum, which we have submitted to the United Nations Committee of Experts on International Cooperation in Tax Matters (otherwise known as the U.N. Tax Committee).

It is an important document; please click here to access it.

The Memorandum discusses statements by the OECD in regarding automatic exchange of tax information, emphasises that many OECD countries already do exchange tax information automatically, and points out that exchange of information upon request is by no means the "international standard of information exchange."

The Memorandum stresses that automatic exchange of information arrangements should be implemented between developing countries and developed countries (especially OECD financial centers and other financial centers), in order to help stop capital flight from developing countries into such onshore and offshore financial centers and the resulting severe tax evasion and loss of government revenue in developing countries.

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