Exchange of information and collaboration among tax authorities

Exchange of information and
collaboration among tax authorities
Who is really on the other side of the table and what do
they know about your company
María Antonia Azpeitia (Madrid)
Paul Halprin (Amsterdam)
Exchange of information
‒
Tax Treaties (Article 26 of the OECD Model Tax Treaty)
‒
Bilateral Agreements on mutual administrative and legal
assistance (Tax Information Exchange Agreements)
‒
Council Directive 2011/16/EU on Administrative
Cooperation in the Field of Taxation
‒
Savings Directive 2003/48/EC
‒
Council Regulation 1798/2003/EC on Administrative
Cooperation in the Field of Value Added Tax and repealing
Regulation
‒
Domestic legislation and practice of the tax authorities
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OECD Framework
• Exchange of information (Common Standard)
With regards to information, the Action 13:
• Base Erosion Profit Shifting (BEPS)
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Exchange of information | OECD framework
Content of the new standard:
‒
‒
The CRS (Common Reporting Standard) which contains the reporting
and due diligence rules to be imposed by participating jurisdictions on
their financial institutions

Will need to be translated into domestic law
The Model CAA (Competent Authority Agreement), which contains
detailed rules on exchange of the information

Can be executed within existing legal frameworks,
including bilateral tax treaties (provided they include
a provision equivalent to Article 26 of the OECD
Model Tax Convention), or the Multilateral Convention
on Mutual Administrative Assistance on
Tax Matters (the Multilateral Convention)
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Exchange of information | OECD framework
Current situation (AEOI Standard):
•
Over 60 countries and jurisdictions have already publicly committed to
implementation
•
More than 40 have committed to a specific and ambitious timetable
leading to the first information exchanges in 2017.
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Exchange of information | OECD framework
In 2013 the G20 Leaders endorsed an Action Plan to address Base Erosion
and Profit Shifting (BEPS: 15-point Action Plan)
With regard to information, Action 13:


Is focused on achieving better transparency for tax
administrations and more global consistency for taxpayers:
Establishes format for transfer pricing documentation and a
template for country-by-country reporting to Tax Authorities
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Exchange of information | An EU perspective
Administrative cooperation in the field of taxation
•
Council Directive 2011/16/EU of 15 February 2011 overhauling Directive
77/799/EEC
•
Establishes time limits for provision of information on request
•
Allows officials of one member state to participate in administrative
enquiries on the territory of another member
•
Introduces provisions on the automatic unconditional exchange of readily
available information from 2015
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Exchange of information | An EU perspective
Administrative cooperation in the field of taxation
•
Provides that information exchange is made using standardised forms,
formats and channels of communication
•
Extends co-operation to cover taxes of any kind related to individuals
(ownership of and income from immovable property; life insurance
products not covered by any other agreement; pensions; income from
employment; directors' fees)
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Exchange of information | An EU perspective
Combatting corporate tax avoidance
•
Tax Transparency Package:
•
Transparency on Tax Rulings
•
Streamline legislation on the automatic exchange of information
•
Assess possible new transparency requirements for multinatiols
•
Review the Code of Conduct on Business Taxation
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Exchange of information | An EU perspective
•
EU Savings Directive (EUSD) (2003/48/EC) enables automatic exchange
of information between EU jurisdictions on savings income of EU residents
•
Directive 2014/48/EC (24 of March of 2014) has modified the Savings
Directive to adapt it to the international standard of automatic
exchange of information (AEOI)
− 2014: Austria & Luxembourg have removed their vetoes on the
amendment of the Savings Directive following commitment by the
EC to reach similar agreements with other European (non EU)
financial centers (Switzerland, Liechtenstein, Andorra, Monaco and
San Marino)
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Exchange of information | An EU perspective
Amendments after the review of the Savings Directive:
•
Close loopholes concerning intermediate structures and financial products
(all untaxed entities & legal arrangements)
•
Extend scope of global assets held by structures
•
Extend to new types of saving income and products (all life insurance,
structured notes and derivatives.)
New rules must be adopted by Members before 1 January 2016
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Exchange of information | An EU perspective
Council Regulation 1798/2003/EC on Administrative Cooperation in the
Field of Value Added Tax and repealing Regulation
•
Exchange of information upon request
•
Request for notification
•
Exchange of information without request (automatic exchange)
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Exchange of information | The EU G5
•
2013: France, Germany, Italy, Spain and the UK have committed
themselves to work together even more effectively to combat international
tax evasion, beyond the provisions of the Directive.
•
The five countries are already launching a pilot multilateral exchange
facility project based on the arrangements made with the US under
FATCA and look forward to a speedy conclusion of bilateral agreements
based on the Model.
•
A group of more than 40 "early adopters" has welcomed the initiative
(OECD and non-OECD members)
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Exchange of information and other tools
•
A multi-jurisdictional tax audit is an arrangement (formal or informal) by
two or more countries to examine simultaneously and independently, each
in its own territory, the tax affairs of taxpayers in which they have a
common or related interest with a view to exchanging any relevant
information that they obtain.
•
Joint tax audits arise when a tax authority invites other countries to join in
conducting a joint audit.
One single audit team, with the
same information, which has to
come to one conclusion
Until now, not a lot of
appetite for joint audits
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Exchange of information and tools |
Practical experience
•
Are taxing authorities effectively using exchange of information and tools
of cooperation?
•
Is there a focus on specific companies / industries or structures / planning
schemes?
•
Formal / informal requests?
•
Spontaneous exchange of information?
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Exchange of information and tools |
Practical background
Upon request:
•
How active are jurisdictions / tax audit teams?
•
Equal treatment of all counterparts?
•
What if a taxing authority does not have the information requested?
Can they ask the taxpayer for it and under which kind of proceedings?
•
Does a request for an exchange of information trigger an audit?
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Exchange of information and tools |
Practical experience
•
•
Are taxing authorities notifying taxpayers?
•
Do the taxpayers of the country requesting the information have an
opportunity to be involved / make a representation beforehand?
•
Can taxpayers appeal against the requests?
National rules / principles limiting the exchange of information: can taxing
authorities ask for information that they could not have obtained in their
own country? How do rules like attorney / client privilege –that differ
substantially among countries- operate in these situations?
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Exchange of information and tools |
Practical experience
•
Do you have experience / are you aware of cases where foreign tax
auditors have been involved in a tax audit of your country? Joint audit?
•
Any experience on multi jurisdictional tax audits?
•
Areas of special focus?
•
VAT and Customs?
•
Transfer pricing and alleged base erosion schemes ?
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Contact
María Antonia Azpeitia
Partner
Tax
Paul Halprin
Legal Director
Tax
[email protected]
+ 34 91 230 45 30
[email protected]
+ 31 20 551 7820
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