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OECD: Automatic Exchange of Information update

As the world becomes increasingly globalized and cross-border activities become the norm, tax administrations of different countries need to work together to ensure that taxpayers pay the right amount of tax to the right jurisdiction. To assist with this effort, the Convention on Mutual Administrative Assistance in Tax Matters (“the Convention”) was developed jointly by the OECD (Organization for Economic Co-operation and Development) and the Council of Europe in 1988 and amended by Protocol in 2010.

The amended Convention provided for all possible forms of administrative co-operation between states in the assessment and collection of taxes and ranges from the exchange of information on request, as well as automatic exchanges, to the recovery of foreign tax claims.

The attached table represents a list of jurisdictions participating in the convention as of October 28, 2016. A full list of entry dates under the existing standard can be downloaded here.

In addition, the OCED developed the new global standard on Automatic Exchange of Information (AEOI) called CRS (common reporting standard) that represents the international consensus on automatic exchange of financial account information for tax purposes, the goal of which is to reduce tax evasion. It provides for the exchange of non-resident financial account information with the tax authorities in the account holders’ country of residence. Participating jurisdictions that implement AEOI send and receive pre-agreed information each year, without having to send a specific request.

The CRS requires financial institutions to report information on accounts held by non-resident individuals and entities (including trusts and foundations) to their tax administration. The tax administration then securely transmits the information to the account holders’ countries of residence on an annual basis.

The CRS specifies the financial account information to be exchanged, the financial institutions that need to report, and the different types of accounts and taxpayers covered:

The financial information to be reported with respect to reportable accounts includes all types of:

  • Investment income (including interest, dividends, income from certain insurance contracts and other similar types of income)
  • Account balance
  • Sales proceeds from financial assets

The financial institutions that are required to report under the CRS:

  • Banks
  • Custodians
  • Other financial institutions such as brokers, certain collective investment vehicles and certain insurance companies

Reportable accounts include accounts held by:

  • Individuals (including individuals who ultimately control passive entities which hold reportable accounts)
  • Entities (which includes trusts and foundations)

Over 100 jurisdictions have committed to implementing the CRS as of October 28, 2016.

The table below summarizes the intended implementation timelines of the CRS.

Country Entry into force under current standard Entry into force under new standard
Australia 01/12/2012 2018
Belgium 01/04/2015 2017
Belize 01/09/2013 2018
Bermuda 01/03/2014 2017
British Virgin Islands 01/03/2014 2017
Canada 01/03/2014 2018
Cayman Islands 01/01/2014 2017
China 01/02/2016 2018
Denmark 01/06/2011 2017
Finland 01/06/2011 2017
France 01/04/2012 2017
Germany 01/12/2015 2017
Guernsey 01/08/2014 2017
India 01/06/2012 2017
Ireland 01/09/2013 2017
Isle of Man 01/03/2014 2017
Italy 01/05/2012 2017
Japan 01/10/2013 2018
Jersey 01/06/2014 Not entered
Liechenstein 01/12/2016 2017
Luxembourg 01/11/2014 2017
Malta 01/09/2013 2017
Mexico 01/09/2012 2017
Netherlands 01/09/2013 2017
Russia 01/07/2015 2018
Singapore 01/05/2016 2018
Spain 01/01/2013 2017
Sweden 01/09/2011 2017
Switzerland 01/01/2017 2018
UK 01/10/2011 2017
USA Not entered Not entered

The United States has not signed an agreement as it has undertaken its own automatic information exchanges pursuant to FATCA since 2015 and has entered into intergovernmental agreements (IGAs) with other jurisdictions to do so.

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