On 13 December 2018 the OECD published the 2017 Peer Review Reports on the Exchange of Information on Tax Rulings. The peer reviews were conducted as part of the follow-up work and monitoring of developments in line with the recommendations of the report on Action 5 of the project on base erosion and profit shifting (BEPS) on the spontaneous exchange of tax rulings.
The Inclusive Framework on BEPS has assessed the progress of 92 jurisdictions in relation to ensuring that the spontaneous exchange of information on tax rulings takes place in a timely manner. The reports show that increased transparency has been achieved on tax rulings. More than 16,000 tax rulings have been identified and almost 21,000 exchanges of information have been completed. Around 60% of recommendations issued in the first annual report last year have already been successfully dealt with.
If the tax administration has timely access to tax rulings granted to a foreign related party of a resident taxpayer this can be used in conducting a risk assessment. In the absence of information on the tax rulings there could be concerns over profit shifting.
The report contains 60 jurisdiction-specific recommendations on issues such as improving the timeliness of the exchange of information and ensuring that exchanges of information are made with respect to preferential tax regimes that apply to income from intellectual property.
The OECD’s Inclusive Framework will conduct the next annual peer review in 2019, to ensure that recommendations for improvement continue to be addressed and to include new members in the process.