The OECD announced on 28 October 2016 that 106 jurisdictions globally have now signed the Multilateral Convention on Mutual Assistance in Tax Matters, the latest signatory being the Cook Islands. The OECD notes that this Convention is the most powerful instrument in international tax cooperation and covers all types of administrative assistance.
The Convention provides for the protection of taxpayer rights in relation to the exchange of information. The types of assistance envisaged by the Convention include the exchange of information on request; spontaneous information exchange; automatic exchange; the possibility of performing tax examinations abroad; simultaneous tax examinations and provision for countries to assist each other in tax collection.
The Convention can be used in the timely implementation of transparency measures in the project on base erosion and profit shifting (BEPS) and is a tool in combating illicit financial flows. Aligning the Convention to the international standard on information exchange has ensured that developing countries may also benefit from a transparent tax environment.
