OECD releases two reports on automatic exchange and tax confidentialityJuly 31, 2012
On 24 July 2012, the Organisation for Economic Co-operation and Development (OECD) issued two new reports on automatic exchange and tax confidentiality of information.
The report on automatic exchange of information describes what it is, how it works, where it stands and what challenges remain.
The report on confidentiality of information exchanged examines all aspects of ensuring the protection of information exchanged for tax purposes.
Confidentiality of information is essential for all forms of exchange, but in particular, for automatic exchange of information.
Automatic exchange of information: what it is, how it works, benefits, what remains to be done
The OECD has been active in facilitating automatic exchange for many years.
The OECD’s work in this area is focused on helping to make automatic exchange into an effective compliance tool for countries wishing to use it.
The report on automatic exchange was presented to G20 leaders at their June 2012 summit in Los Cabos and welcomed in the G20 communiqué.
It describes the essential aspects of automatic exchange and gives answers to the following key questions:
- What is automatic exchange of information?
- How does it work?
- What is the legal basis?
- What is the current state of play?
- Does automatic exchange work?
- What is the OECD doing in this area and what still needs to be done?
Note. Exchange of information comes in different forms and includes exchange upon request, spontaneous information exchange and automatic exchange of information.
To engage in exchange of information, and in particular, automatic exchange of information, countries need a high level of assurance that the information is kept confidential both in law and in practice and is only used for the purposes allowed under the applicable exchange instrument.
The report on confidentiality examines the legal framework to protect the tax confidentiality of information exchanged and the administrative policies and practices in place to protect confidentiality.
The report sets out best practices related to confidentiality and provides practical guidance, including recommendations and a checklist, on how to meet an adequate level of protection.
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