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Ministry of Finance, Norway

ATAF-EC-URA TECHNICAL CONFERENCE ON EXCHANGE OF INFORMATION AND TAX TREATIES

Kampala, Uganda 19-20 April 2012 SESSION 5: “THE VARIOUS AGREEMENTS BETWEEN STATES” – THE NORDIC EXPERIENCE Per O. Gjesti Deputy Director General Ministry of Finance Norway

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The Nordic Countries

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Regional cooperation in international tax matters

Similar legal and administrative systems • ”Common languages”-ability to understand texts – no translation • ”Home market” for inter-regional trade, finance, labour • And ”one market” for multinationals • Transfer pricing and CUP

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Nordic multinational Agreements

• Agreement on Administrative Assistance 1972 • (Multinational DTA 1980 – no EOI article) • AAA covers all direct and indirect taxes, except custom duties • EOI both automatic, spontaneous and on request, assistance in collection, simultanoeus audits • Regular meetings on policy, ad hoc groups on specific cases – the personal contacts

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ISSUES

I will speak about the lessons from: • Regional cooperation • The Nordic Agreement on Assistance in Tax Matters • The OECD/Council of Europe multilateral, and the transformation to a global instrument • The Nordic TIEA Project • The Global Forum on Transparency and Exchange of Information

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Nordic AAA – information sharing

• Trends in aggressive tax planning and evasion techniques • Experience with existing and new regulations • Detection techniques and methods • Simultaneous audits, audit selection and organisation • Presence at audits in other countries •

Nordic AAA model for OECD/CoE multinational

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OECD/CoE multinational 1980-87

• Originally open for members only – limited accession • Ability to reserve against indirect taxes, recovery, automatic EOI • But reservations may be withdrawn easily and administratively!

• Coordinating Body: Competent Authorities of all signatories • Express mandate of CB to discuss and propose clarifications and develop improvements

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OECD/CoE becomes Global Instrument

• G 20 2009: The need for a multilateral global instrument • CB: Mandate to develop the OECD/CoE, with Secretariats of OECD and CoE • The OECD standard for EOI: Eliminate bank secrecy, unknown beneficial ownership and own tax interest as obstacles to EOI • Open for all countries that meet the standards of the Global Forum PRP including tax secrecy and taxpayer protection • In force 2011

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The Multinational

• Applications from non-members of OECD/CoE considered by CB – approval by consensus • All OECD members and observers (except Switzerland) have declared that they will sign • All G 20 likewise • A large number of signatures have been received • How to join: http://www.oecd.org/document/14/0,3746,en_2649_ 33767_2489998_1_1_1_1,00.html

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OECDs Harmful Tax Practises project

• Background: ”Race to the bottom” – growing number of preferential regimes in OECD states • 1998 Recommendation: Identify and eliminate harmful regimes in member states within 2005 • Stop outflow to tax havens: invite them to commit to transparency or face defensive measures • 38 jurisdictions defined as tax havens • TIEA-Model: drafted by the first 11 committed jurisdictions and 11 OECD members

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TIEAs

• Oblige to exchange on request information from banks and financial institutions, ownership and without own tax interest • Practical challenge: bilateral agreements, formal requirements, lack of resources and experience • Small countries back in the queue • Nordic Council of Ministers decided to launch project: common negotiations that lead to 7 bilateral agreements. Strength in numbers

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Nordic TIEA Project

• • • Approved by Nordic Council of Ministers in 2006  Strengthen the Nordic negotiating position  Keep costs for negotiation work down – joint teams Exchange of Information Steering Group  Denmark, Sweden, Finland, Greenland, Iceland, Norway and The Faroe Islands Project Manager  Employed by Nordic Council  Project will continue to the end of 2012

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Nordic TIEA Project

• Priorities according to reported needs of nordic tax authorities  Slow start but able to sign with important financial centers:       Isle of Man 30 October 2007 Jersey 28 October 2008 Guernsey 28 October 2008 Cayman Islands 1 April 2009 Bermuda 16 April 2009 British Virgin Islands 18 May 2009 Difficult discussions on the “level playing field”, still bank secrecy in some OECD members

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Nordic TIEA Project – external developments

G 20 statement in early 2009: fundamental change, ”the end of bank secrecy” • OECD members all approve the OECD standard • Establishment of the ”Global Forum on Transparency and Exchange of Information ” in Mexico July 2009 • All the 38 jurisdictions defined as tax havens now commit to the standard and become members of GF

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Nordic TIEA Project

• Because of these developments the negotiations increased sharply • We have now signed TIEAs with 36 jurisdictions, 25 are in force, 3 more drafts are initialled.

• The aim is to conclude TIEAs or equivalent with all closed financial centers, 43 jurisdictions have been identified • We wish to eliminate the possibilities for our taxpayers to hide in safe havens

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Nordic TIEA Project

• What if we do not succeed?

• We are in negotiations with all the remaining 5 • They are all members of GF and will have to fulfill their commitment there • If there is a final refusal we will have to consider defensive measures • Our experiences so far are very promising, information is provided and millions have been collected

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Lessons from the Nordic TIEA Project

• The general preventive effect is hard to measure, but the rise in the number of voluntary disclosures is remarkable • Joint negotiations save resources and time, and there is strength in numbers • Is this a way to follow for ATAF?

I definitely think so, but it requires that you can agree on similar models, policies and tactics and are able to ”speak with one voice” towards the other party.

The toughest discussions for us have been between the Nordics

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