The Organisation for Economic Co-operation and Development (OECD) has released the Harmful Tax Practices – 2023 Peer Review Reports on the Exchange of Information on Tax Rulings report on 16 December 2024.
Under the BEPS Action 5 minimum standard, members of the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) have committed to counter harmful tax practices with a focus on improving transparency.
One part of the Action 5 minimum standard is the transparency framework for compulsory spontaneous exchange of information on certain tax rulings. The exchange on tax rulings is a critical tool in improving access of tax administrations to information relevant to assess the corporate tax affairs of their taxpayers and to efficiently tackle tax avoidance and other BEPS risks.
Over 140 countries and jurisdictions participate in the Inclusive Framework on BEPS and take part in the peer review process to assess their compliance with the transparency framework. Specific terms of reference and a methodology have been agreed for the peer reviews, focusing the assessment on five key elements: information gathering process, exchange of information, confidentiality of the information received, statistics on the exchanges on rulings, and transparency on certain aspects of intellectual property regimes.
This report reflects the outcome of the eighth annual peer review of the implementation of the Action 5 minimum standard.
As at 31 December 2023, over 26,000 tax rulings in scope of the transparency framework had been issued by the jurisdictions being reviewed. This is the cumulative figure, including certain past rulings issued since 2010. Over 1,900 tax rulings in scope of the transparency framework were issued in 2023 by the 136 jurisdictions reviewed.
Over 58,000 exchanges of information took place by 31 December 2023, with approximately 4,000 exchanges undertaken in 2023, 6,000 exchanges undertaken in 2022, 6,000 exchanges undertaken in 2021, 5,000 exchanges undertaken during 2020, 7,000 exchanges undertaken during 2019, 9,000 exchanges undertaken during 2018, 14,000 exchanges undertaken during 2017 and 7,000 exchanges during 2016.
104 jurisdictions did not receive any recommendations, as they have met all the terms of reference. A further nine jurisdictions received only one recommendation.
56 recommendations for improvement have been made for the year in review.
83 peer input questionnaires were submitted providing feedback on the conduct of the exchanges by Inclusive Framework members. Peer input is not mandatory, but in cases where it was provided it has in a number of cases allowed jurisdictions to revise their processes and improve the clarity and quality of information exchanged.
In a number of cases, the peer review process has assisted jurisdictions in identifying areas where improvement is required, and jurisdictions have been able to take action to implement changes over 2024 while the peer review was ongoing. Where these changes were implemented in 2024, they are generally not taken into account in the recommendations for the year 2023. However, these changes would be reviewed in a subsequent peer review.
