International Exchange Of Tax Information Research Articles

The Interaction of the Duty to Make a Suspicious Activity Report under the Proceeds of Crime Act and the Obligation to Report under Hallmark D of DAC6 and the OECD Mandatory Disclosure Regime

This article exists because of a disagreement. The authors regularly work together in practice and in print. They both work in the field of international tax information exchange regimes and have opinions that sometimes diverge. They diverge particularly in relation to the subject matter of this article.

An Analysis of the “Foreseeable Relevance” Standard and the International Exchange of Tax Information: Are the European Union and the OECD in Agreement?

This article examines the standard of “foreseeable relevance” in international exchange of tax information comparatively as set out in the OECD Model and the EU legal framework. It questions whether the new foreseeable relevance standard makes it “manifestly” foreseeable, and whether the European Union and the OECD are in agreement.

Міжнародні підходи до використання звіту в розрізі країн міжнародної групи компаній як інформаційного джерела оцінки податкових ризиків

Introduction. An important step after the country-by-country reports exchange for the first time is the creation of institutional support for the identification and assessment of tax risks based on the data obtained as part of the international exchange of information. Mentioned above actualizes the need for conduction of a complementary analysis of the OECD model legislation in the context of the mentioned issues in order to determine ways of harmonizing it with domestic practice. Problem Statement. Analysis of key provisions of the OECD model recommendations regarding the use of country-by-country reporting as an information source for assessing tax risks. The purpose of the research is to carry out a complementary analysis of the model institutional basis for the use of country-by-country reporting as an information source for assessing tax risks. Methods. In order to achieve the research purpose, the methods of analysis, synthesis, induction, deduction, grouping, description, comparison, theoretical generalization, as well as the abstract-logical method were used. Results. The content of the OECD recommendations “Country-by-Country Reporting: Handbook on Effective Tax Risk Assessment” has been revealed, and basing on the results of the conducted research the authors substantiated the need for harmonization of the domestic practice of identification and assessment of tax risks based on the data obtained as part of the international exchange of information with the model recommendations of the OECD. Particular attention should be paid to the peculiarities of this process during martial law. Conclusions. Basing on the results of the research, the authors proved that after successful passing the stage of implementation of the OECD requirements into national legislation in terms of the form of the country-by-country report and the procedure for its filling it, there is an urgent need for creation by our country institutional support for the identification and assessment of tax risks based on the data obtained within the framework of the international exchange of tax information and its harmonization with the relevant model provisions of the BEPS Action Plan.

Автоматичний міжнародний обмін податковою інформацією: особливості попередніх умов запровадження в Україні під час воєнного стану

Introduction. The main trend in the international tax cooperation is to create institutional conditions to enhance the transparency of the ?nancial ?ows of multinational enterprises for tax administrations and to provide them with relevant information to assess and examine transfer pricing risks. The OECD provides governments with model legislation in the context of this issue, which brings to the fore the issue of its implementation to make the international exchange of tax information work automatically. Problem Statement. To determine the status of implementation of the OECD recommendations on substantial prerequisites for the automatic exchange of international tax information in Ukraine, in particular the peculiarities of their implementation in the martial law period. Purpose. To analyze approaches in the sphere of international exchange of information for tax purposes and to evaluate the status of implementation of substantial preconditions for the introduction of country by country reporting of the international group of companies. Methods. The comparative analysis of the national tax legislation and OECD recommendations regulating the aspects of creation of substantial preconditions for automatic international exchange of tax information was carried out. Results. The list is highlighted and the essence of essential preconditions for countries to obtain access to the international exchange of tax information is revealed. The level of implementation of the stages of introduction of country by country reporting of the international group of companies in Ukraine has been analyzed with the focus on the creation of the appropriate institutional conditions for the implementation of OECD recommendations. According to the results of the research, it has been proved that further steps of formation of the mentioned prerequisites in the country are regulation of con?dentiality aspects of tax information, which is the subject of international automatic exchange, which should correspond to the international approaches with an emphasis on the changes, caused by the introduction of martial law. Conclusions. Having joined the OECD Enhanced Cooperation Programme and committed to implementing the BEPS Action Plan, Ukraine is incorporated into the global tax regulatory framework. After the stage of drafting and approving legislative norms, creation of essential preconditions for obtaining and access to the international exchange of tax information, the next step is to ensure its confidentiality. In this process, it is important to protect the national interests and national security of Ukraine of income and property and prevention of tax evasion.

Does Ecuador Comply with International Tax Information Exchange Standards Required to Apply the Multilateral Agreement on Mutual Administrative Assistance in Tax Matters?

The exchange of tax information is essential to prevent fraud and tax evasion. Accordingly, states and international organizations have developed international conventions regarding the exchange of tax information. One example is the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Some States, including Ecuador, have signed and ratified this Convention. However, it is unclear whether Ecuador currently meets almost all Convention's requirements.In this article, I investigated the Ecuadorian regulations and showed that Ecuador complies with most of the Convention’s standards. However, Ecuador does not have a specific comprehensive law that regulates information exchange. Therefore, Ecuador should develop policies and norms that exclusively regulate tax information exchange to facilitate practical information exchanging with other tax authorities.

МІЖНАРОДНИЙ ОБМІН ІНФОРМАЦІЄЮ ЯК ЗАСІБ ВИЯВЛЕННЯ РИЗИКІВ ТРАНСФЕРТНОГО ЦІНОУТВОРЕННЯ

The article considers global trends in the exchange of tax information in order to combat violations in the field of transfer pricing and identify aggressive tax planning schemes. It has been found that the growing role of international groups of companies in the global economy, as well as the use of aggressive tax planning by their representatives to transfer revenues to more taxable jurisdictions (including offshore jurisdictions), undermines the competitiveness of national tax systems. Therefore, recently it has become especially important to establish close cooperation between the tax authorities of the world in the exchange of tax information on the activities of international groups of companies. The international exchange of tax information is considered to be one of the main tools for combating aggressive tax planning. The authors of this study analyzed the current state and key aspects of the development of international exchange of tax information on the example of developments of the Organization for Economic Cooperation and Development and the member states of the European Union. The importance of introducing reporting in terms of countries in Ukraine and the world is substantiated, which in the context of globalization of the world economy will significantly simplify the work of controlling units of tax authorities to identify the risks of transfer pricing, and ensure the prompt exchange of tax information at the international level. The key elements of the implementation of reporting by country (Country-by-Country Reports) are analyzed, as well as the main indicators of tax risk are structured and characterized, which can be identified by analyzing the information provided by taxpayers in such reports. Measures to enhance the effectiveness of identifying and assessing transfer pricing risks based on the analysis of information provided in Country-by-Country Reports are proposed. It is emphasized that to identify transfer pricing risks, in addition to analyzing taxpayers' reporting, it is necessary to take into account all available information sources (macroeconomic statistics, exchange of tax information between countries, customs data, government databases, commercial registers, public information, etc.).

Results of tax transparency standards implementation in the Organization of economic cooperation and development

The study subject is the measures of suppression so called «Harmful tax competition» process and the world financial system transparency increasing, as well as international taxation rules transparency increasing. These measures are taken by Organization of economic cooperation and development (OECD) and European Union (EU) countries since the mid of 2000. This study describes their main results. The theme of Russian Federation participation in the process of international automatic tax information exchange is touched.Conclusions were drawn about the increase of the level of tax legislation so as to reach the international level in field of compliance. It has done due to implementation of the financial information automatic exchange standard.Also the aspect of inefficiency of the most traditional schemes of international tax optimization in the future are touched. The negative aspects of the international exchange of tax information were also noted.

The Impact of International Tax Information Exchange Agreements on the Use of Tax Amnesty: Evidence from Norway

In this paper we develop a model for tax amnesty applications in a multi-period setting. One key insight from the model is that applying for amnesty becomes more attractive at the moment when stricter enforcement is announced, even if the implementation of the policy is in the distant future. We use our model to make sense of how international tax information exchange agreements affects voluntary disclosure of wealth and income previously hidden in tax havens. Our data is from Norway. In accordance with the dynamic amnesty model we observe a strong announcement effect of a tax information exchange agreement between Norway and Switzerland and Luxembourg, the two most important tax havens for Norwegian tax evaders. However, the effect levels off very quickly, much faster than our model predicts. We think this is because the initial announcement of the tax agreement exaggerated the risk the agreement imposed to those who had hidden taxable income and wealth in Switzerland. We also estimate and find significant effects of the press releases the Norwegian Tax Authority issues to inform taxpayers about new international tax agreements and the amnesty, or voluntary disclosure, option that exists in the Norwegian tax code.

The Impact of International Tax Information Exchange Agreements on the Use of Tax Amnesty: Evidence from Norway

In this paper we develop a model for tax amnesty applications in a multi-period setting. One key insight from the model is that applying for amnesty becomes more attractive at the moment when stricter enforcement is announced, even if the implementation of the policy is in the distant future. We use our model to make sense of how international tax information exchange agreements affects voluntary disclosure of wealth and income previously hidden in tax havens. Our data is from Norway. In accordance with the dynamic amnesty model we observe a strong announcement effect of a tax information exchange agreement between Norway and Switzerland and Luxembourg, the two most important tax havens for Norwegian tax evaders. However, the effect levels off very quickly, much faster than our model predicts. We think this is because the initial announcement of the tax agreement exaggerated the risk the agreement imposed to those who had hidden taxable income and wealth in Switzerland. We also estimate and find significant effects of the press releases the Norwegian Tax Authority issues to inform taxpayers about new international tax agreements and the amnesty, or voluntary disclosure, option that exists in the Norwegian tax code.

FOREIGN CURRENCY CONTROL IN CASE OF FREE MOVEMENT OF CAPITAL

The current practice of foreign currency control in Russia is based on the mechanisms that were formed during the period of the Soviet administrative and command economy. The approaches applied in Russia to foreign currency regulation and foreign currency control (repatriation requirements, closed list of operations for crediting funds to foreign accounts) create barriers for the Russian business and citizens, significantly complicating the procedure for their foreign economic activity. At the same time, the existing restrictions, in conditions when the requirements for the sale of a part of foreign currency earnings and other restrictions on the movement of capital are not applied, do not ensure the achievement of macroeconomic goals, which are laid down in the preamble of the act “On foreign currency regulation and foreign currency control”. The foreign currency act in Russia does not currently ensure the achievement of the goals for which it was adopted. In practice, the act solves the tax objectives and the tasks of combating the legalization of criminal revenue. Developed countries and members of the Organization for economic cooperation and development (OECD) do not use similar mechanisms to control the movement of funds. At the same time, foreign countries are actively developing instruments to control cross-border cash flows within the framework of legislation on combating money laundering and financing of terrorism, as well as in the framework of improving the mechanisms of international exchange of financial information for tax purposes. The authors propose a reform of the current foreign currency regulation aimed at the abolition of currency restrictions and the development of alternative mechanisms for controlling the cross-border movement of funds by improving the international exchange of tax information, including automatic one, as well as improving the effectiveness of measures to combat money laundering in international trade.

Wymiana informacji z terytoriami stosującymi szkodliwą konkurencję podatkową – stan obecny i perspektywy rozwoju

The goal of the article is presenting the national and international efforts aimed at neutralising the growing popularity of tax havens and reducing the “flight capital” phenomenon. The paper analyses countermeasures implemented in order to increase the transparency of international financial markets. First, the article examines the current state of Polish agreements that can form the legal basis for the international exchange of tax information. Next parts of the paper analyse the statistical data provided by the Polish Office of Tax Information Exchange in Konin, in order to answer the research question, whether the available solutions constitute tools that allow for the efficient exchange of tax information with “uncooperative” territories. The final part of the paper includes concluding remarks, together with attempts to predict the direction of future development in international tax information exchange.

Responsibility for Committing Accounting Offenses in the Criminal Law with Finland and Russia as an Example

This article discusses the responsibility and punishment for violation of accounting rules in Finland and Russia. Multilateral Competent Authority Agreement, signed by 87 countries, will ensure consistent practical implementation of international tax information exchange on income and taxes paid. Modern audit has developed methods for detection of fraudulent financial reporting and provision of economic security.

Prawne instrumenty regulujące transfer środków pieniężnych do rajów podatkowych

The article presents Polish and EU legislation measures as well as research and suggestions of the Organization for Security and Co-operation in Europe and the International Monetary Fund concerning the issue of tax havens. On the basis of the abovementioned regulations and recommendations, a thesis has been adopted that there is a pressing need for a coordinated international exchange of tax information. The present legal status and its influence on the use of tax havens are analyzed using the comparative method. The research results confirm the tax institutions’ unwillingness to cooperate. Regardless of the established legal bases and action schemas, information exchange remains very limited. Conclusions on the matter include a list of existing procedures that need revisiting and reimplementation in control institutions of the European Union member states.

International Exchange of Tax Information: Foreign and Domestic Experience

Розкрито принципи, види та сучасний стан обміну інформацією між податковими органами України та іноземними юрисдикціями. Проаналізовано міжнародні стандарти розкриття та обміну інформацією в цілях оподаткування та стану їх упровадження в українське податкове законодавство. Сформовано пропозиції щодо інтеграції принципів міжнародного обміну інформацією, зокрема у найбільш прогресивній його формі – автоматичного обміну, з метою підвищення ефективності адміністрування податків та протидії ухиленню від сплати податків українськими платниками.

Automatic Exchange of Tax Information in the European Union – The Standard for the Future

This article analyses various perspectives regarding the future European standard for automatic exchange of tax information. It presents the legal framework for such information exchange within the European Union and discusses the influence of the US FATCA on the EU legal environment. Finally, it questions whether or not the international tax information exchange system, based on automatic transfer of data, can work effectively and whether the obstacles caused by differences amongst Member States can be overcome.

THE FUTURE OF AUTOMATIC TAX INFORMATION EXCHANGE IN EU COUNTRIES

Tackling the issue of tax revenue losses starts to be the highest priority for developed countries. In the attempts to protect the national tax bases and to fight harmful tax competition, the whole world starts to give the extra weight to the principles of fiscal transparency and information exchange, addressing them on international agendas. Also the European governments are seeking to recover their missing billions of taxes. The article focuses on the main issues connected with transparency and exchange of tax information. It brings closer the internationally agreed standard of exchange of information for tax purposes and shortly presents the modes of tax information exchange. Next the study turns to the European Union’s perspective. It analyzes the legal framework of automatic tax information exchange within the EU and presents the influence of the U.S. FATCA on the EU legal environment. It also tries to answer the question whether creating the international tax information exchange system, based on automatic transfer of data, could be possible in the future.

The global prospects of taxation

As the process of establishing international economic and financial relations between national economies is on the rise, many states encounter substantial difficulties in the process of collecting their tax claims. The most powerful countries in the world try to overcome this controversy by changing the international tax rules. The turning point was the financial-economic crisis of2008-2009, when the international community more vigorously embarked on resolving international tax issues. The OECD, the G20, the UN, the EU and a number of other powerful international organizations continued their activities on establishing a stronger framework of the international tax system. Global tax initiatives embodied in the soft law regulations have changed (to a varied extent) the structure of national tax systems as well as the direction of national policies, and ultimately undermined the financial foundations of the social welfare state. The world's 'taxation landscape' is indisputably dominated by two major processes embodied in the concepts of tax harmonization and tax competition. The global crisis in financing contemporary states has weakened their resistance towards more extensive international tax cooperation. As a result, they increasingly accept global tax standards and are more vigorously involved in the international exchange of tax information for the purpose of counteracting international tax fraud. Changes in national tax systems are necessarily accompanied by changing relations between tax administrations and multinational companies as large taxpayers. The traditional public law relations are gradually changed by introducing some elements of 'negotiations and mutual agreement', which are aimed at strengthening mutual trust and avoiding unnecessary disputes and costs. Although they are currently no more than theoretical assumptions and political considerations, there are proposals for introducing global taxes and establishing the world tax organization. Irrespective of the idealistic or utopian nature of these proposals, we simply cannot rule out the possibility that a future world disaster may serve as an valid excuse for accepting global taxes in order to remove the detrimental consequences of a force majeure. In that context, there is a growing number of countries that have been accepting the global tax standard on the automatic exchange of financial information, which has laid a solid legal and technical ground for introducing global taxation. The 'global taxation network' is gradually extending to all tax payers, featuring full fiscal transparency. Unless such global plans are undermined, all natural and legal persons will de lege ferenda become prisoners of the global fiscus. Unfortunately, such an apocalyptic future of taxation is quite probable considering the determination of the powerful international organizations and the world elite acting through these institutions to implement the global political agenda.

Taxpayers' confidentiality and privacy rights in the international exchange of tax information

The exchange of tax information is a distinctive feature of international tax cooperation processes. The trend of intensive communication between the national tax administrations has been a political priority in economically developed countries. This area of international tax law has been subject to significant changes in the past few years. Countries are prompted to pursue the automatic exchange of tax information by entering into multilateral treaties on the exchange of tax information rather than engage in international exchange of tax information upon request by entering into bilateral agreements. These processes are promptly expedited owing to the incredible development of information and communication technologies. These developments are basically aimed at preventing different forms of international tax fraud which generate significant financial losses in the circumstances of current economic crisis. Such efforts may be justifiable regarding the interests of the countries of residence; but, what about the legal status of ordinary taxpayers who are now subject to a comprehensive and far-reaching control? The new concept may be appropriate for tracking tax fraud or embezzlement but what are its implications for law-abiding taxpayers? The national legislatures are obliged to provide for the protection of confidentiality of exchanged tax information but many states have not fully recognized the importance of providing adequate legal protection of sensitive personal and financial data. There are only a few countries whose legislations explicitly prescribe the taxpayers' right to be informed, the right to consult tax administration and the right to seek tax administration intervention as a form of legal protection in international exchange of tax information. The Serbian tax legislation does not envisage the obligation of tax authorities to notify the taxpayers about the request submitted by foreign tax authorities to provide some tax information. The OECD standards on the international exchange of tax information are given in the form of soft law. As they are endorsed by the G20 and the European Union, the member states are obliged to incorporate them into the national legislations as binding rules on international tax cooperation. However, the boundaries of international public (tax) law are radically changing in light of the requirements for fiscal transparency and subrogation of the confidentiality of information in banking transactions.

Toward an Automatic but Asymmetric Exchange of Tax Information: the US Foreign Account Tax Compliance Act (FATCA) as Inflection Point

This article describes the most recent trends in the field of the international exchange of tax information and also pretends to guess whether the initiatives taken have lead to a more neutral, fair and homogenous global tax system. In particular it analyses the current OECD policy on international exchange of tax information, made under request and the recent international provisions setting up new mechanisms of automatic exchange of that information, either unilateral or bilateral. It also focuses on the new US Foreign Account Tax Compliance Act (FATCA), the subsequent Joint Statement made by the US Treasury and five European Countries and whether it represents an inflection point in the US and world policies of international exchange of tax information.

Revenue Sharing and Information Exchange under Non‐discriminatory Taxation*

AbstractThe international exchange of tax information, and its merits compared to withholding taxation, has emerged as a central topic in international tax policy. We characterize and compare the outcomes that emerge, in a two‐country world, with and without information exchange, under the assumption that countries are unable to tax residents and non‐residents differentially. The analysis focuses on the role of asymmetries in country size (capturing a key feature of tax havens) and on the impact and potential desirability of schemes to share the revenue raised by withholding (as under the new EU savings tax arrangements) or (more innovatively) as a consequence of information exchange. We show that, irrespective of any difference in country size, it is in the interests of both countries, in terms of tax revenue, that all revenue collected from non‐residents be transferred to the residence country—which would entail taking the EU practice even further from the norm, but is currently the standard in relation to information exchange. A withholding scheme with revenue fully reallocated in this way gives both countries more revenue than does information sharing, whatever the allocation under the latter.