This foundational lesson establishes the international legal and institutional framework that underpins the exchange of information for tax purposes. It covers the evolution from bank secrecy to automatic exchange and the key instruments that make global tax co-operation possible.
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The Evolution of Tax Transparency: The OECD has been at the forefront of international efforts to promote all forms of information exchange since it established its Working Party on Tax Avoidance and Evasion in 1971 . A landmark development was the 2009 restructuring of the Global Forum on Transparency and Exchange of Information for Tax Purposes as a self-standing body to carry out in-depth peer reviews assessing compliance with international standards . In 2010, the multilateral Convention on Mutual Administrative Assistance in Tax Matters was amended to open it to all countries and strengthen its requirements, particularly on access to banking information .
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The 2014 Standard: In July 2014, the OECD released the Standard for Automatic Exchange of Financial Account Information in Tax Matters, calling on all jurisdictions to obtain relevant financial account information from their financial institutions and exchange that information automatically with jurisdictions of residence of account holders on an annual basis . This represented a major step toward ending bank secrecy once and for all .
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The Convention on Mutual Administrative Assistance in Tax Matters: This is the most comprehensive instrument facilitating international co-operation of tax authorities to tackle tax evasion and avoidance . It provides for a full range of cross-border tax assistance, including tax information exchange, joint audits, and recovery of foreign tax liabilities . Today, close to 150 jurisdictions participate in the Convention, including all G20 countries, all OECD countries, major financial centres, and an increasing number of developing countries .
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The Global Forum’s Mandate: The Global Forum is the leading multilateral body mandated to ensure that jurisdictions around the world adhere to and effectively implement both the exchange of information on request standard and the standard of automatic exchange of information . These objectives are achieved through a robust monitoring and peer review process . The Global Forum also runs an extensive capacity-building programme to support its members in implementing the standards and help tax authorities make the best use of cross-border information sharing channels .