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Peer Review Report Shows Significant Progress on Global Transparency and Exchange of Tax Information — Orbitax Tax News & Alerts

On 9 November 2022, the OCED announced the release of the Peer Review of the Automatic Exchange of Financial Account Information 2022, which shows that significant global progress on transparency and exchange of tax information has been made, although further work is needed. Further, 10 new peer review reports on the Exchange of Information on Request were published for Barbados, the British Virgin Islands, Iceland, Israel, Kuwait, the Maldives, Morocco, Slovenia, South Africa, and Turkey.

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Global Forum reports significant progress on global transparency and exchange of tax information, while noting further work is needed

9/11/2022 - Significant global progress on transparency and exchange of tax information is reported by the Global Forum. Jurisdictions are not only automatically exchanging information on 111 million accounts but are actively ensuring that financial institutions effectively comply with the requirements. Furthermore, they continue to effectively implement exchanges on request and the Global Forum reports significant impacts of its wide-scale capacity-building activities. Nevertheless, more work is needed to maximise the benefits.

Peer Review of the Automatic Exchange of Financial Account Information 2022 presents the first peer reviews with effectiveness ratings for the 99 countries and jurisdictions which had committed to starting Automatic Exchange of Information (AEOI) in 2017 or 2018. It shows that virtually all jurisdictions have put in place the necessary legal frameworks and successfully started exchanges, and are exchanging information without significant timing or technical issues.

Significant progress was achieved, with two-thirds of the jurisdictions actively conducting compliance activities to ensure financial institutions are reporting accurate information. These jurisdictions are given "On Track" ratings. A further 15 jurisdictions are found to have put in place credible compliance frameworks. The need for further implementation actions led these jurisdictions to be rated as "Partially Compliant". Finally, 19 jurisdictions have been found to have fundamental deficiencies in their frameworks. Exchanges are usually taking place each year, but, as these jurisdictions have not yet completed the development of their operational frameworks to verify financial institutions' compliance, they were rated "Non-Compliant".

The peer review report was presented during the first day of the annual plenary meeting of the Global Forum, which is bringing together ministers, other high-level authorities and delegates from more than 100 member jurisdictions in Seville, Spain. The three-day meeting is focusing on how the Global Forum can move to the next stage of delivering its tax transparency agenda, promoting the fairness of tax systems and strengthening domestic revenue mobilisation.

"The Global Forum continues to shape the tax transparency landscape," said OECD Secretary-General Mathias Cormann. "Widening access to financial account information for tax administrations helps ensure everyone pays their fair share of tax, boosting revenue mobilisation for countries worldwide, and particularly for developing countries."

In 2022, countries automatically exchanged information on 111 million financial accounts worldwide, covering total assets of EUR 11 trillion. Over EUR 114 billion in additional tax revenues have been identified through voluntary disclosure programmes, offshore tax investigations and related measures since 2009.

The Global Forum also published 10 new peer review reports today on the Exchange of Information on Request (EOIR) for Barbados, the British Virgin Islands, Iceland, Israel, Kuwait, the Maldives, Morocco, Slovenia, South Africa and Türkiye. Seven jurisdictions were issued updated ratings on their practical implementation of the EOIR standard, with six of them (Barbados, Iceland, Morocco, Slovenia, South Africa and Türkiye) granted the satisfactory "Largely Compliant" rating, and one (British Virgin Islands) rated as "Partially Compliant". The other three reports (Israel, Kuwait and Maldives) only cover the analysis of the legal and regulatory frameworks, with implementation aspects to be analysed in the future.

In 2022, the Global Forum Secretariat provided technical assistance to 95 developing country members, including training to thousands of officials, as part of its global efforts to strengthen tax-collection capacity worldwide.

"The Global Forum is working to guarantee that all its members are supported to implement the tax transparency standards, and to use them to fight tax evasion and mobilise domestic resources," said Maria Jose Garde, Chair of the Global Forum. "No jurisdiction can be left behind. This is the idea that has defined the spirit in which our 165 members work together to keep advancing tax transparency, and it shall continue to be the case."

After six years, Ms Maria Jose Garde will step down as the Chair of the Global Forum and Mr Gaël Perraud, Deputy Director of European and International Taxation at the Tax Policy Department of the French Ministry of Economy and Finance, will take over as new Chair in January 2023.

Further information on the Global Forum's activities can be found in its latest annual report.