A report issued by the OECD on 28 June 2017 contains updates on the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum has 142 member countries and aims to enhance global tax transparency, curtail banking secrecy and combat tax evasion. A series of international tax transparency standards has been developed and the Global Forum is monitoring the implementation of the standards by its members.
In July 2016 the G20 group of countries requested the Global Forum to draw up criteria for identification of those jurisdictions that has not reached an adequate level of implementation of the international standards. The standards include those in relation to Exchange of Information on Request (EOIR) and Automatic Exchange of Information (AEOI).
For the G20 summit in July 2017 the Global Forum is preparing a list of non-cooperative jurisdictions. To avoid inclusion on the list a jurisdiction has to meet at list two of the following benchmarks:
- a rating that the jurisdiction is largely compliant with the AEOR standard;
- a commitment to implement the standard on EOIR with the first exchanges to be made in 2018 at the latest; and
- participation in the Multilateral Convention on Mutual Administrative Assistance on Tax Matters or participation in a sufficiently broad exchange network permitting both EOIR and AEOI.
However a jurisdiction may also be determined by the Global Forum’s peer review process to be non compliant; or it can be blocked from moving past Phase 1 of the process.
With the approach of the G20 summit a fast track review process was set up to evaluate the efforts of some jurisdictions to meet the transparency standards. The results of this fast track review indicate that most jurisdictions have made progress towards meeting the standards.
Fifteen jurisdictions that had been given a less than satisfactory rating on against the EOIR standard were evaluated to assess whether their rating would be upgraded if they were to be reviewed again. Following this process the Global Forum assigned the following provisional ratings:
A number of jurisdictions were found to be largely compliance with the international standards, these being Andorra, Antigua and Barbuda, Costa Rica, Dominica, the Dominican Republic, Guatemala, the Federated States of Micronesia, Lebanon, Nauru, Panama, Samoa, the United Arab Emirates and Vanuatu. One jurisdiction, the Marshall Islands, was found to be partially compliant.
Discussions are continuing with Trinidad and Tobago, the only jurisdiction which has not yet made sufficient progress towards satisfactory implementation of the tax transparency standards and progress is anticipated soon.
In addition to the fast track process a full peer review of the jurisdictions is to be carried out to ensure that jurisdictions meet the revised international standard for exchange of information on request, which now includes an additional requirement relating to beneficial ownership.
Progress made by the reviewed jurisdictions includes the elimination of strict bank secrecy and bearer shares, improved access to accounting records and more rigorous enforcement of obligations to maintain information. More jurisdictions have signed the Multilateral Convention on Mutual Administrative Assistance on Tax Matters.
The results will be reported to the G20 Leaders Summit in July 2017. A second round of peer reviews has begun and jurisdictions that were involved in the fast track process will be reviewed at an early stage of the second round reviews.