Global Standard: Automatic Exchange of Information
A Global standard
Automatic Exchange of Information: Tax evasion is a fact, and in order to tackle that effectively the Automatic Exchange of Information Standard has been created by the OECD, Organisation for Economic Co-operation and Development and also by G20. It is indeed a FATCA style model.
This Single global standard requires for jurisdictions to obtain information from their financial institutions which is automatically exchanged with other jurisdictions on an annual basis. The Standard sets out the financial account information that needs to be exchanged, the relevant financial institutions that need to report, and requires not only deposit-taking banks to report, but also custodial institutions, certain investment entities, and certain insurance companies. The type of account information to be reported includes but is not limited to, account balances, interest, dividends, and sale and redemption proceeds from financial assets.
The purpose is to reduce the possibility for tax evasion, by providing exchange of non-resident financial account information with the tax authorities in the account holders’ country of residence, enabling the discovery of formerly undetected tax evasion in an effort to increase transparency, cooperation, and accountability among financial institutions and tax administrations.
A large number of jurisdictions have announced their plan to implement the new Standard and approximately 50 jurisdictions will work towards having their first information exchanges by September 2017, with many more to follow in 2018.
The signatories of this Agreement were: Albania, Anguilla, Argentina, Aruba, Austria, Belgium, Bermuda, British Virgin Islands, Cayman Islands, Colombia, Croatia, Curaçao, Cyprus, Czech Republic, Denmark, Estonia, Faroe Islands, Finland, France, Germany, Gibraltar, Greece, Guernsey, Hungary, Iceland, Ireland, Isle of Man, Italy, Jersey, Korea, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mauritius, Mexico, Montserrat, Netherlands, Norway, Poland, Portugal, Romania, San Marino, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Turks and Caicos Islands, and the United Kingdom.
It remains to be seen, what effects this will bring to the financial world!
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