On 18 September 2015 the OECD launched a report dealing with the issue of access by tax administrations to information held by government units dealing with financial intelligence. This publication looks at measures to increase a whole of government approach to tax and financial crimes by improving information sharing between tax and financial authorities.
Under this approach the tax authorities would have an important role in detecting not just tax evasion but other serious financial crimes including bribery and money laundering. Currently however tax authorities do not always have sufficient access to reports issued by financial authorities on suspicious transactions. Even where tax authorities have some access to such reports there are normally significant legislative and non-legislative barriers.
A survey of 28 countries has identified various models for how tax authorities are given access to financial reports on suspicious activities. These can be categorized as unfettered access by the tax administration to the suspicious transaction reports; joint decision making on the use of such reports by the tax administration; or models that allow the financial authorities to decide what information should be shared with the tax authority.
The OECD report looks at the challenges posed by each method and how to overcome these challenges. The report also emphasizes that confidentiality requirements must be considered when more access to the financial information is permitted.
The recommendation from the report is that tax administrations should be given as much access as possible to reports by financial authorities on suspicious transactions, subject to necessary safeguards on confidentiality. Countries should therefore put in place the necessary legislative framework to allow this and also ensure that operational procedures allow reports of suspicious transactions to be used as effectively as possible.