In the previous issue of
frontiers in tax we reported on the background to the development of
Automatic Exchange of Information (AEoI) and explored the emerging framework of international tax transparency.3 That article noted that at their St. Petersburg Meeting of September 2013, the G20 announced that they expected to begin Automatic Exchange of Information by the end of 2015.4
A key subsequent step was the
OECD publication on 13 February 2014 of a multilateral Standard for automatic exchange of financial account information.5 This Standard was developed in partnership between the OECD and the G20 countries, and in close co-operation with the EU. The document is in two parts: Part I contains the introduction to the Standard; Part II contains the text of a Model Competent Authority Agreement (CAA) and a Common Reporting and
Due Diligence Standard (CRS). It defines a Standard for mutual exchange of information on account holders with foreign tax residence, account balances, income and gross proceeds from certain financial transactions.
The new Standard was endorsed in May 2014 during the OECD?s annual Ministerial Council Meeting in Paris by all 34 member countries, along with Argentina, Brazil,
China, Colombia, Costa Rica, India,
Indonesia,
Latvia, Lithuania,
Malaysia, Saudi Arabia, Singapore and South Africa.6 Fortyfour countries and jurisdictions have committed to early adoption of the Standard and implementation by 2016 for exchange beginning in 2017.7
On 21 July 2014, the OECD released a detailed commentary on the standard to help ensure its consistent application.8 The OECD also plans to provide information and guidance on the technical measures necessary to implement the processes of actual information exchange, including compatible transmission systems and a standard format for reporting and exchange. This latter component is scheduled to be presented in time for the G20 meeting of finance ministers in September 2014.
According to the current implementation timeline of the early adopters, the new regime will start in 2016 by obliging financial institutions to classify all new accounts from 1 January 2016 and all pre-existing accounts as of 31 December 2015.
