What is OECD automatic tax information sharing?

In the modern world, the automatic exchange of tax information OECD is a hot topic of discussion of individuals and legal entities.

However, there are people who do not understand what OECD is and why it exists.

What is OECD?

What is the OECD? It is a unique forum where participating countries work together to solve global problems related to the economy, society and the environment. OECD also focuses on understanding and helping governments respond to new developments and problems. The OECD provides the conditions under which governments can compare political experience, look for answers to common problems, identify best practices, and work to coordinate domestic and international policies. That's what the OECD really is.

What is the automatic exchange of information OECD?

As the world becomes increasingly globalized, and the cross-border
activity becomes the norm, tax administrations must work together so that taxpayers pay the right amount of tax in the right jurisdiction. An open international architecture in which taxpayers carry out cross-border, but tax administration remain limited to their national borders, can only be maintained where tax administrations cooperate. One of the key aspects of international tax cooperation is the automatic exchange of information by the OECD.

OECD information is exchanged in various forms and includes exchanging on request, spontaneous exchange of information and automatic exchange of information. The OECD has a long history of work in all forms of information exchange, and Article 26 of the OECD Model Convention provides the basis for all three forms of information exchange.

The OECD has prepared a manual on automatic exchange and has provided training to countries interested in developing the necessary framework and operational automatic exchange at a practical level.

A key component in connection with the automatic exchange of information is the need to ensure the confidentiality of information. This aspect has long been a key area for the OECD in relation to all forms of information exchange, not only automatic exchange, but is particularly noticeable in the field of automatic exchange. To participate in the exchange of information and, in particular, the automatic exchange of information, countries need a high level of comfort so that the information is kept confidential both in law and in practice and is used only for the purposes permitted by the applicable exchange tool.

How useful is the automatic exchange of information by the OECD?

As a tool to combat non-compliance with the laws of offshore companies, the OECD automatic exchange of tax information has several advantages. It can provide timely information about noncompliance when the company evades taxation. This can help identify cases of non-compliance, even if tax administrations have not had any indication of non-compliance.

Other benefits include its deterrent effect, enhancing voluntary compliance and encouraging taxpayers to report all relevant information. Automated swapping can also help educate taxpayers in their reporting obligations, increase tax revenues and thus lead to fairness - to ensure that all taxpayers pay their fair share of tax in the right place at the right time. In a small number of cases, countries were able to integrate the information obtained automatically with their own systems.

Who is involved in the exchange of information?

There are many jurisdictions that participate in the exchange of information. There are classic offshore companies that caught up for the sake of preserving the reputation and flow of customers.

Each state has a list of countries with which it is planned to exchange information. In fact, the list remains a list, and in order for the exchange to happen, you must fulfill many requirements and, finally, sign an agreement.

Russia is also one of the players of this game, the author of which is the OECD. Of course, no one cancels the chance that Russia can begin to fully receive information. As, for example, in the case of the exchange of Switzerland with Russia.

For all questions related to the automatic exchange of tax information, please contact us!