OECD And Council Of Europe Strengthen Tax Cooperation

by Ulrika Lomas, Tax-News.com, Brussels

01 June 2010

The Organisation for Economic Cooperation and Development (OECD) and the Council of Europe have developed a Protocol amending the multilateral Convention on Mutual Administrative Assistance in Tax Matters to bring it in line with the international standard on exchange of information for tax purposes and to open it up to countries that are neither members of the OECD nor of the Council of Europe.

This was in response to an April 2009 G20 initiative calling for action “to make it easier for developing countries to secure the benefits of the new cooperative tax environment, including a multilateral approach for the exchange of information.”

The scope of the Convention is broad as it covers a wide range of taxes and goes beyond exchange of information on request. It also provides for other forms of assistance including:

• Spontaneous exchanges of information;
• Simultaneous examinations;
• Performance of tax examinations abroad; and
• Assistance in recovery of tax claims.

The Convention also provides for automatic exchanges of information, but this form of assistance requires a preliminary agreement between the competent authorities of the parties willing to provide each other information automatically.

The amending Protocol aligns the Convention to the internationally agreed standard on exchange of information for tax purposes in that it provides that bank secrecy and a domestic tax interest requirement should not prevent a country from exchanging information for tax purposes.

In addition, the Convention contains several provisions which restrict the use of information exchanged under the Convention. These restrictions have been lifted and the Convention is now fully in line with the internationally agreed standard.

The updated Convention was signed by 11 countries already parties to the Convention (Denmark, Finland, Iceland, Italy, France, Netherlands, Norway, Sweden, Ukraine, the United Kingdom and the United States). In addition, Korea, Mexico, Portugal and Slovenia signed both the Convention and the amending Protocol.

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