AEOI – Automatic exchange of information
06 June 2016
Fighting tax evasion is a common interest and challenge for jurisdictions all over the world. Cooperation across national boundaries and the automatic exchange of financial account information between tax authorities are considered essential in this fight. These goals led to the development of the Common Reporting Standard (CRS), a regime similar to FATCA, creating reciprocity among dozens of states.
The CRS, formally referred to as the Standard for Automatic Exchange of Financial Account Information, is a standard for the automatic exchange of information (AEOI), developed by the Organisation for Economic Co-operation and Development (OECD). The legal basis for exchange of data is the Convention on Mutual Administrative Assistance in Tax Matters.
In conjunction with the G20, the OECD developed the Common Reporting Standard (CRS) as a global standard for the automatic exchange of information. First steps towards more tax transparency with regard to automatic information exchange were made in 2013, as the Finance Ministers of France, Germany, Italy, Spain and the UK (the countries that developed the FATCA intergovernmental agreements with the United States) announced their intention to exchange FATCA-type information amongst themselves. Shortly thereafter, the G8 Leaders welcomed the OECD General Report “A step change in tax transparency”, which set out the concrete steps that needed to be undertaken in order to put a global model of automatic exchange into practice.
Following this commitment by G8 Leaders to establish automatic exchange as the new global standard, the G20 Leaders fully endorsed the OECD proposal for a truly global model of automatic exchange in September 2013. In July 2014, the OECD Council released the full version of the Standard for Automatic Exchange of Financial Account Information in Tax Matters, which was fully endorsed by the G20 Finance Ministers.
In October 2014 over 50 jurisdictions confirmed adoption of the Common Reporting Standard by signing a multilateral competent-authority agreement. Nearly 60 jurisdictions have now committed to start exchanging data in September 2017; many others will begin participation in 2018.
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