INTRODUCTION
The Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) is the world’s leading multilateral body within which work in the area of transparency and exchange of information for tax purposes is carried out. The mandate of the Global Forum is to ensure a rapid and effective implementation of the standards on transparency and exchange of information for tax purposes. Its work focuses on two internationally recognised standards: exchange of information on request (EOIR) and automatic exchange of financial account information (AEOI).
The Global Forum also works to assist members, especially those jurisdictions with lower capacity, to implement and benefit from the standards effectively. There are 140 jurisdictions which are currently members of the Global Forum, including all G20 countries, all OECD members, all key international financial centres and many developing countries. Each member participates on an equal footing. The Global Forum is self-funded, with a self-standing Secretariat hosted in the Organisation for Economic Co-operation and Development (OECD).
IMPLEMENTING THE STANDARD ON AUTOMATIC EXCHANGE OF INFORMATION
There are four core requirements to implement the standard on AEOI:
1) Translating the reporting and due diligence rules into domestic law;
2) Ensuring a legal basis is in place to automatically exchange information;
3) Putting in place information technology and administrative infrastructure;
4) Protecting confidentiality and safeguarding data. A commitment to implement the AEOI standard:
Reciprocity: both sending and receiving information (although jurisdictions may elect to only send information, which may be appropriate for jurisdictions that do not have an income tax).
Exchanging with all interested appropriate partners: these are jurisdictions interested in entering into an AEOI relationship and which meet standards on confidentiality, data safeguards and proper use of the information.
Commencing information exchanges within a specific timetable: jurisdictions, and in particular all financial centres, are expected to implement the standard with first exchanges occurring by September 2018. However, in recognition of the particular challenges faced, lower capacity developing countries may require further time and assistance to effectively implement the standard. The Global Forum is therefore committed to assist developing countries to implement the standard in as timely a manner as practicable.
SUPPORT AVAILABLE TO MEMBERS TO ASSIST WITH IMPLEMENTATION
It is a key responsibility of the Global Forum to help its members implement the EOIR and AEOl standards. The critical importance of supporting developing countries in particular has been widely recognised, including in the 2015 Addis Ababa Third International Conference on Financing for Development. The Secretariat has a dedicated team in place to support members, as well as an online help desk and resources.
The support activities may fall into three broad categories:
Bilateral capacity building, focusing on the needs of one jurisdiction at a time. This includes i) analysis of the existing legal framework, guidance on the amendments needed to implement EOIR and AEOl and reviews of the legislative proposals to that end, ii) analysis of the organisation and administrative practices and guidance to improve them, iii) preparation to the EOIR peer review process, iv) assistance in the implementation of the different modules of the AEOI Staged Approach, with confidentiality and data safeguards being an important element of this work.
Peer-to-peer learning between member jurisdictions, which takes the form of regional training seminars and competent authority meetings, focusing on issues such as awareness, auditor sensitisation, best practice in exchange of information, multilateral solutions for implementing AEOI, etc.
Development of tools, which support members’ implementation of the international standards, such as practical guidelines, work manuals, model agreements and legislation, and tracking systems.
BENEFITS OF JOINING THE GLOBAL FORUM
Ensures participation in a unique forum for all members, including financial centres and developing countries, to have a voice in the decision making process, as all core decisions are taken by consensus.
Provides members with international visibility and heightens their profile as a reliable location in which to do business. Compliance with the Global Forum standards assists jurisdictions responding to any lists pertaining to non-cooperative jurisdictions in tax transparency matters. .Members are able to access the dedicated capacity building and support provided by the Global Forum secretariat to help in implementing the standards of EOIR and AEOl. Members are also invited to attend training seminars and knowledge sharing events with international counterparts.
Participating in the monitoring and peer review process, which provides an opportunity to reflect on how the legal framework and practices can be improved. In addition to being peer reviewed, members are invited to participate in reviews of other jurisdictions.
Joining the AEOI group provides access to a forum where implementation challenges can be shared and resolved, and to participate in the design and work of the peer review process.
The Global Forum’s work is linked with other inter-government initiatives, such as fighting illicit financial flows: improving tax transparency will also assist the fight against corruption and money laundering.
A number of international financial institutions incorporate the Global Forum ratings into their policies determining the routing of investments (e.g. the Council of Europe Development Bank, the European Bank of Reconstruction and Development, the European Investment Bank and the International Finance Corporation, a member of the World Bank Group). For example, all of these international organisations restrict the routing of investments through jurisdictions that have been found to be “non-compliant” or “partially compliant” in their peer review for EOIR.
CONCLUSION
The Global Forum uses peer reviews to assess the application of the international standard on the exchange of information upon request (administrative assistance) in individual states. The Global Forum already rated Switzerland as largely compliant during its first round peer review in 2016, and issued some recommendations.
The Global Forum also rated Switzerland as largely compliant in 2020 in the second round of peer reviews. As with all Global Forum members, the second round involved stricter evaluation criteria, such as the quality of administrative assistance requests, group requests and the identification of beneficial owners.
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