Exchange of Information

1. Exchange of Information Douglas Rankin Tax Treaty Team

2. TIEAs • Background to TIEAs • Comparison of TIEAs and DTAs • What you need to request information under a TIEA

3. Background to TIEAs • OECD 1998 report on Harmful Tax Practices • tax havens invited to make commitment to EOI • TIEAs – for use between OECD countries and committed jurisdictions • Model Agreement • G20: new impetus; lots of recently signed agreements

4. TIEAs “foreseeably relevant” potentially all taxes covered (but up to parties to agree) info on request only criminal / civil tax matters jurisdiction / “possession or control” test grounds for refusal use and disclosure: taxes covered by the TIEA DTAs “forseeably relevant” old DTAs only cover direct taxes, newer DTAs usually cover all taxes spontaneous and automatic exchanges also possible use and disclosure: taxes covered by DTA (or by the EOI Article of DTA if that is wider) Comparison of TIEAs and DTAs

5. What you need to request information under a TIEA • Taxpayer’s identity • Describe the info/evidence/assistance you want and the form in which you would prefer to receive it • Tax purpose (and why info wanted is relevant to that tax) • Grounds for believing that the info is in the other territory or in the possession or control of a person there • Name and address of person who has the info (if known) • A statement that the request conforms with your law and with the TIEA, and that if the information was in the requesting state that the requesting state could obtain it • A statement that the requesting state has pursued all means available domestically to obtain the info

6. G20 Developments • White /Grey/Black lists + declarations • Belgium,Luxembourg,Switzerland,Austria • Other financial centres • Liechtenstein

7. Resource Implications • Negotiating • Legislating • Administration • Integrity • Reciprocity

8. Outward requests • EOI team handles outward requests from other directorates within HMRC Local compliance,Special Investigations LBS, Criminal Investigations, Debt Management and Banking EOI team check outward requests and change if necessary

9. Domestic Information Powers • An officer of HMRC can by notice in writing require information and documents from • A taxpayer • A third party If the information or document is reasonably required to check tax position.

10. Information Powers • The word ‘tax’ is defined in the legislation to include ‘relevant foreign tax’ • The powers can be used to obtain information and documents to exchange with a treaty partner

11. Third Party Notices; Safeguards • A notice to a third party must name the taxpayer to whom it relates • A notice can only be issued with either The agreement of the taxpayer, or The agreement of the First-tier Tribunal The First-tier Tribunal is a judicial body, wholly independent of HMRC.

12. Third Party Notices;Safeguards • The Tribunal may not approve the notice unless It is authorised by a senior officer of HMRC Tribunal is satisfied that the notice is justified The third party has received an informal request and has had the opportunity to make representations..plus…

13. Third Party Notices ; Limitations • There are restrictions on what kinds of information and documents can be obtained , consistent with limitations described in OECD Model agreements and commentaries.

14. Third Party Notices;Procedure • UK competent authority receives request from treaty partner for information from a UK third party • EOI caseworker reviews • EOI caseworker prepares papers for Tribunal • Senior Officer reviews/ approves.

15. Third Party Notices;Procedure • Informal request and documents sent to third party • Summary of reasons sent to taxpayer • Application to Tribunal, together with representations • If approved formal notice to third party • Copy to taxpayer • Info/docs received and exchanged

16. UK EXPERIENCE • Recent Protocols/TIEAS • Austria/Switzerland/Luxembourg • Liechtenstein • Whistleblowers

17. Future Developments • Peer review process • Multi-lateral agreements • Automatic exchange • Joint audits