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A brief history of tax
transparency
David James
Tax transparency – the future for tax administrations
Tax administrations are working in an
increasingly digital and globally
mobile world
There has been a sea change in
public opinion on offshore tax
evasion and a demand for those
cheating the system to be
brought to account
Changes in approach to
compliance using transparency are
part of the response to
these changes
2000s
Banking secrecy
34 TIEAs
Multilateral Convention adopted by
11 jurisdictions
No model TIEA
23 year old Mutual
Assistance Directive
In The beginning
Now…
CRS & BEPS
130+ agreed treaties covering
exchange of tax information
Rising number of Multilateral
exchange agreements for
AEoI
OECD model DTS and TIEA
2011 Directive on
Administrative Assistance in Tax Matters
Tools Increasing
2008 Onwards – banking scandals
Swiss bank UBS found to have lured US based customers into investing assets into accounts to evade tax and hide wealth
•Led to partial revelations to the IRS on the holders of such accounts
2010 HSBC found to have helped customers to evade tax
through use of offshore accounts
FATCA and the Common Reporting Standard
Financial Accounts Tax Compliance Act – the US response
• Into force in 2012
• Required financial institutions worldwide to report to the IRS US residents and citizens with accounts in other jurisdictions
• UK – US Intergovernmental agreement signed
• First reporting 2015
Common Reporting Standard
• OECD and G20 led agreements for the automatic exchange of financial accounts data
• 101 jurisdictions
• Came into force 2016 with the first exchanges in 2017
Exchange of tax Rulings
OECD initiative
BEPS actions to prevent harmful tax practices
Exchange of tax rulings between tax administrations
BEPS Action 5 exchanges and under the DAC for EU Member States
The exchanges vary under each
Country By Country Reporting
OECD initiative
Transparency around where a multinational
groups generate
profits
Use in risk assessment,
transfer pricing, CFC
and DPT reviews
Groups with turnover above
€750m
UK headed groups report
to HMRC
Data shared with other relevant
jurisdictions
Receive data on non-UK
headed groups with activities
in the UK
Followed the Panama Papers reports
UK already had plans to publish lists beneficial owners of companies, partnerships, trusts and similar structures
Mechanisms for exchange under review
45 jurisdictions have committed to exchange
Beneficial Ownership