Various Agreements Between States Covering EOI
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Transcript Various Agreements Between States Covering EOI
Various Agreements Between
States Covering EOI
ATAF Conference
Kampala, Uganda
19/20 April 2012
Ron van der Merwe
Types of Agreements
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Double Taxation Agreements
Tax Information Exchange Agreements
Mutual Assistance Agreements
Multilateral Assistance Agreements
First three are bilateral but can also be
negotiated by way of a multi-party process.
Basic Principles
• Creates a legal basis for the exchange of
information between States.
• Sets the standard of foreseeable relevance in
relation to requests.
• Sets standards of confidentiality.
• Ensures that bank secrecy and lack of
domestic tax interest cannot be used as a
barrier to exchanges.
Basic Principles
No obligation to exchange:
• If contrary to administrative laws and practices of either
State
• Information not obtainable under laws or normal
administration of either State
• Trade secrets
• Information injurious to State
Double Taxation Agreements
• Article dealing with EOI is virtually the same in both the OECD
and UN Models.
• Also adopted in regional models such as the SADC Model and
the proposed COMESA Model.
• Scope of exchange includes:
1. Request
2. Spontaneous
3. Automatic
4. Simultaneous Examinations
5. Industry wide exchanges
Double Taxation Agreements
• Current Models extend EOI to taxes of every
kind and description.
• Older treaties might limit EOI to taxes covered
by the treaty.
• DTA also has the possibility of including an
Article allowing assistance in collection – this
is a potential issue of great benefit to
developing countries.
Tax Information Exchange Agreements
• Model created by the OECD and endorsed by
the Global Forum on Transparency and
Exchange of Information.
• Membership in excess of 100 countries.
• TIEAs create a legal basis for EOI when there is
no need for a DTA between States due to low
levels of cross border activity.
• Members obliged to enter into TIEAs if
requested by another Member.
Tax Information Exchange Agreements
• Scope of EOI is limited under a TIEA in
comparison to a DTA.
• EOI may only be done on request.
• Taxes covered may be limited.
• No assistance in collection included.
• Start of a process which hopefully will be
extended in future to include all possible
exchanges??
Tax Information Exchange Agreements
• TIEAs can also be negotiated on a multi-party basis.
• Two multi-party negotiations have already been
successfully carried out under the auspices of SADC.
• Result being 6 TIEAs between SADC Members and
Guernsey and 7 TIEAs between the Isle of Man and
SADC Members.
• Multi-party negotiations for ATAF Members are
recommended by the Working group and endorsed
by the ATAF Council.
Multilateral Assistance Agreement
• ATAF Council has endorsed the possibility of a
Multilateral Assistance Agreement between ATAF
Member States.
• It is not meant to be a substitute for DTAs when
economic relations between any two States would
normally require a DTA.
• The advantage lies in the fact that such a multilateral
could be easily agreed and acceded to by States
whereas a DTA which deals with taxing rights takes
longer to negotiate and bring into operation.
Multilateral Assistance Agreement
• Model drafted by ATAF Working Group to be
presented to Member States for comment.
• Process to achieve consensus on the text would
require either a round table meeting or a written
procedure.
• Probably the best solution is a round table discussion
with delegates from Member States who are
authorised to take relevant decisions.
• Scope is in line with a DTA rather than the limited
TIEA.
Multilateral Assistance Agreement
• Summary of Articles.
Article 1
Definitions and rule for undefined terms.
Article 2
Object of Agreement – full EOI, simultaneous examinations,
tax examinations abroad and assistance in collection.
Article 3
Taxes covered – all taxes on income, capital and taxes on
goods and services.
Multilateral Assistance Agreement
Article 4
EOI provision in line with OECD/UN Article. Confidentiality dealt
with in separate Article.
Article 5
Tax examinations abroad – allows for visits to treaty partner in
order to be present at tax examination.
Article 6
Simultaneous tax examination each in its own territory.
Article 7
Assistance in collection in line with OECD/UN Article and only in
respect of taxes finally due and payable.
Multilateral Assistance Agreement
Article 8
Confidentiality and use in line with OECD/UN standard.
Article 9
Costs including provision for substantial or extraordinary costs.
Article 10
Implementation of legislation to enable compliance with the
Agreement.
Article 11
Agreement does not limit, nor is it limited by, other international
agreements.
Multilateral Assistance Agreement
Article 12
Mutual Agreement procedure relating to implementation and
interpretation of the Agreement and procedures to be used in
exchanges. Direct communication allowed and dispute
resolution sanctioned under ATAF rules.
Article 13
Depositary – ATAF Executive Secretary.
Article 14
Notification of the Competent authority for each State.
Article 15
Ratification and entry into force. 5 Member States.
Multilateral Assistance Agreement
Article 16
Amendments.
Article 17
Accession by further Member States.
Article 18
Signature by duly authorised representatives.
Article 19
Withdrawal.
EOI
• Finally, it should be noted that the multilateral
looks at exchanges between Members – the
process of entering into EOI agreements
outside ATAF should be a priority. Much
information will be sourced in countries
outside ATAF and Africa.
• Can you do an audit/transfer pricing
investigation without information??