Wednesday, June 05, 2013

Is a new multilateral automatic information exchange platform crystallising?

Update: official link discovered, here.

An important statement has emerged from a group of European countries, which appear to represent rapid progress towards the emergence of a truly global multilateral system of information exchange, based most heavily on the U.S.' Fatca legislation.

Here is the statement, which we can only find on unofficial websites for the moment but which we've received official confirmation of by email:
STATEMENT BY BELGIUM, THE CZECH REPUBLIC, DENMARK, FINLAND, FRANCE, GERMANY, IRELAND, ITALY, THE NETHERLANDS, POLAND, PORTUGAL, ROMANIA, SLOVAKIA, SLOVENIA, SPAIN, SWEDEN and THE UNITED KINGDOM
on the Pilot Multilateral Automatic Information Exchange Facility

ECOFIN, 14 May 2013
Automatic information exchange between tax authorities is a powerful tool in tackling and deterring tax evasion.  Tax evasion is a global problem and we should look for a global solution, otherwise the problem is simply displaced.

In this regard we strongly support the development of a single global standard for automatic exchange of information covering a wide scope of income and entities. The alternative of competing standards would lead to fragmentation, gaps and significantly greater costs for industry and businesses and tax authorities.

The agreements being signed with the US with a large number of jurisdictions and the EU’s leading experience regarding automatic exchange of information provide us with a unique opportunity to move from a series of bilateral agreements to a multilateral system. We therefore strongly support the initiative for a pilot of multilateral automatic information exchange based on agreements with the US. We invite all EU Member States and other countries to commit to join this initiative with the aim of rapidly creating a truly global system of automatic information exchange which would mark a step change in our ability to tackle tax evasion.

We also request the Commission to support and promote the work of the OECD, G8, and G20 in developing a single global standard for automatic exchange of information, with a view to its quick implementation at EU level also.

2 Comments:

Anonymous Anonymous said...

Thank you for this information.

I strongly support efforts to curb international tax evasion. I particularly support multilateral initiatives. When FATCA initially appeared, it was a strictly unilateral action. Since then, it has morphed in the direction of a series of bilateral agreements. However, bilateral agreements will never be fully satisfactory, as most individual countries lack the clout the US has to force their will upon will upon other countries. Bilateral agreements are also going to be inconsistent among each other, creating unwanted complexity and opportunities for evasion.

What will a multilateral agreement look like? For one thing, it will be incorporate residence-based taxation. In particular, it will reject citizenship-based taxation, as practiced by the US. Otherwise, every country in the world will be obliged to complicate record keeping for the sake of a single country.

Andrew H

6:22 pm  
Anonymous Anonymous said...

Thank you for this information.

I strongly support efforts to curb international tax evasion. I particularly support multilateral initiatives.

When FATCA initially appeared, it was strictly unilateral. Since then, it has morphed in the direction of a series of bilateral agreements. However, bilateral agreements will never be fully satisfactory, as individual countries lack the clout the US has to force their will upon will upon other countries. Bilateral agreements are also going to be inconsistent, creating unwanted complexity and opportunities for evasion.

What will a multilateral agreement look like? For one thing, it will be incorporate residence-based taxation. In particular, it will reject citizenship-based taxation, as practiced by the US. Otherwise, every country in the world will be obliged to complicate record keeping for the sake of a single country.

As I read it, the May 14 ECOFIN document, far from endorsing FATCA, proposes a multilateral alternative. I say bravo!

Andrew H.

6:36 pm  

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