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Andres Knobel ■ Findings of the 2nd TJN Survey on Automatic Exchange of Information

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Tax justice reports

Findings of the 2nd TJN Survey on Automatic Exchange of Information

Automatic exchange of bank account information under the OECD’s Common Reporting Standard is set to start during 2017. While more than 100 countries have committed to implement it, there are serious loopholes and concerns. Tax Justice Network sent an online multiple choice survey in English and Spanish to the administrations of more than 130 jurisdictions. The questionnaire was completed by respondents in 30 countries. Those respondents were: 3 low-income economies , 6 lower-middle-income economies, 9 upper- middle-income economies and 12 high- income economies. The results of this survey indicate strong interest in sharing information to tackle issues such as corruption and money-laundering, along with significant misunderstandings over the how access to automatic exchange of information would work and the costs that might be involved.

Automatic exchange of bank account information under the OECD’s Common Reporting Standard is set to start during 2017. While more than 100 countries have committed to implement it, there are serious loopholes and concerns with regards to access by all countries (especially developing ones), its enforcement, the limited use of the information that can be obtained and the lack of participation by the United States.

In order to understand countries’ views relating to the Common Reporting Standard, the Tax Justice Network sent an online multiple choice survey in English and Spanish to the administrations of more than 130 jurisdictions. The questionnaire was completed by respondents in 30 countries. Those respondents were: 3 low-income economies , 6 lower-middle-income economies, 9 upper- middle-income economies  and 12 high- income economies.

Answers revealed that 83% of 30 respondents would be in favour of sharing information with other local authorities to also tackle non-tax issues, such as corruption or money laundering.

In terms of proposals for potential sanctions to be taken against financial centres (but not against developing countries), 67% of 30 respondents are in favour of such sanctions.

83% of 29 respondents are interested in accessing automatic exchange of information statistics. In terms of the financial centres that should publish these statistics; 48% of 29 respondents (of all four levels of income) would be interested in statistics from Switzerland, followed by 31% choosing the U.S.

With regard to those countries indicating they were not interested in such automatic exchange of information statistics, some of their explanations for this reveal a misunderstanding. Firstly, while one country said that they would obtain this information from other countries based on the Common Reporting Standard legal framework, no country is guaranteed to receive information from all other financial centres. Secondly, the issue of taxpayers’ rights (very likely to privacy) was raised. However, automatic exchange of information statistics will contain only aggregate information, and therefore they will not violate any taxpayer’s rights. Thirdly, while one respondent referred to the costs already imposed on financial institutions, the truth is that financial institutions already have to collect and report this information for each account.

In relation to the U.S., even though the U.S. will implement only the FATCA standard (but not the Common Reporting Standard), 69% of 17 respondents have not yet determined whether they would treat the U.S. as a jurisdiction “not participating in the Common Reporting Standard”.

Lastly, the Global Forum has been promoting pilot projects where a developed country would partner up and assist a developing one to help it implement the Common Reporting Standard. While only 3 out of 9 respondents were aware of these pilot projects, 8 respondents expressed interest in them.

Australia is becoming a positive example of assistance to developing countries. Not only has Australia provided assistance to the Philippines, to help it learn the process of using automatic exchange of information data for compliance purpose, but it is also the first country to commit to publishing a basic version of automatic exchange of information statistics.

Key findings

  • 83% of 30 respondents would be in favour of sharing information with other local authorities to tackle non-tax issues, such as corruption or money laundering.
  • In terms of proposals for potential sanctions to be taken against financial centres (but not against developing countries), 67% of 30 respondents are in favour of such sanctions.
  • 83% of 29 respondents are interested in accessing AEOI statistics. In terms of the financial centres that should publish these AEOI statistics; 48% of 29 respondents (of all four levels of income) would be interested in statistics from Switzerland, followed by 31% choosing the U.S.
  • There are significant misunderstandings with regard to the scope of information that is available, potential violations of taxpayers’ rights (there are no such violations), and the costs that might be involved.
  • Australia is becoming a positive example of assistance to developing countries. Not only has Australia provided assistance to the Philippines, to help it learn the process of using AEOI data for compliance purpose, but it is also the first country to commit to publishing a basic version of AEOI statistics.

Key recommendations

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