Standard for Automatic Exchange of Financial Information in Tax Matters is released by OECD

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oecdThe OECD has recently released the full version of a new global standard for the exchange of information between jurisdictions.
G20 Leaders at their meeting in September 2013 endorsed the OECD proposal for a global model for automatic exchange of information and invited the OECD to develop such a new single standard for automatic exchange of information to fight tax evasion and ensure tax compliance. The Standard calls on jurisdictions to obtain information from their financial institutions and automatically exchange this information with other jurisdictions on an annual basis. It sets out the financial account information to be exchanged, the financial institutions required to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions. The OECD has recently released the full version of a new global standard for the exchange of information between jurisdictions. It was developed by the OECD under a mandate from the G20, endorsed by G20 Finance Ministers in February 2014, and approved by the OECD Council in July 2014. This is an important step towards a greater transparency, and the major outcome is putting an end to banking secrecy in tax matters. The Standard provides for annual automatic exchange between governments of financial account information, including balances, interest, dividends, and sales proceeds from financial assets, reported to governments by financial institutions and covering accounts held by individuals and entities, including trusts and foundations. The new consolidated version includes commentary and guidance for implementation by governments and financial institutions, detailed model agreements, as well as standards for technical and information technology solutions, i.e. a standard format and requirements for secure transmission of data. ‘The G20 mandated the OECD to work with G20 and OECD countries and stakeholders toward the development of an ambitious information exchange model that would help governments fight tax fraud and tax evasion,’ said OECD Secretary-General Angel Gurria. ‘Today’s launch moves us closer to a world in which tax cheats have nowhere left to hide.’ The OECD will formally present the Standard to G20 Finance Ministers at their next meeting in Cairns, Australia, on 20-21 September. ‘Our message will be clear and simple: the automatic exchange of information standard is ready for implementation,’ Mr Gurria said.