Multilateral Convention on Mutual Administrative Assistance in Tax Matters
The Convention on Mutual Administrative
Assistance in Tax Matters: An
increasingly Global Instrument to Fight
Offshore Tax Evasion and Avoidance
46th CIAT General Assembly
23-26 April, 2012, Santiago, Chile.
By Pascal Saint-Amans
Director of the Centre for Tax Policy and Administration
OECD
[email protected]
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Evidence-based policy dialogue
Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Belgium, Denmark, Finland, France, Georgia, Germany, Greece, Iceland,
Ireland, Italy, Moldova, Netherlands, Norway, Poland, Portugal, Russia,
Slovenia, Spain, Sweden, Turkey, Ukraine and United Kingdom
Canada
United
States
Mexico
Costa Rica
India
Japan
Korea
Argentina
Brazil
South
Africa
Australia
Indonesia
34 Countries have signed the Multilateral Convention and more
countries are expected to adhere to it soon
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Global Forum Members
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
An increasingly Global Instrument:
• All G20 countries have signed the Convention
(China and Saudi Arabia committed to sign)
• 11 CIAT countries (Argentina, Brazil, Canada,
Costa Rica, France, Italy, Mexico, Netherlands,
Portugal, Spain and U.S.)have signed the
Convention so far :
– Colombia has officially expressed its interest to
adhere to the Convention
• An increased interest of developing countries
in the Convention
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
An increasingly Global Instrument:
• The opening of the Convention beyond OECD
and Council of Europe membership offers a
valuable opportunity for countries to swiftly
implement their commitments to the
internationally agreed standards of
transparency and exchange of information for
tax purposes and for emerging and developing
countries to secure benefits of the new cooperative tax environment.
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Presentation of the Convention
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Background
EOI on request and beyond
Benefits of the Convention
Process for Accession
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Background
• Initially developed under the auspices of the OECD and
of the Council of Europe (CoE) and open for signature
since 1988 by members of the CoE or OECD.
• 2009 G20 call for a multilateral instrument for
international cooperation in tax matters open to all
countries to benefit developing countries.
• The Convention was upgraded to bring it in line with
the internationally agreed standard of transparency
and exchange of information and open it for signature
to all countries.
• Protocol opened for signature in May 2010 entered
into force on 1st June 2011
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
EOI on Request and Beyond the
Standard
• EOI on request: when the information is
foreseeably relevant for the administration or
enforcement of taxes
• Automatic exchange: an option
• Assistance in recovery of tax claims
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Benefits of the Convention (1)
• It provides a single umbrella for multi-party
cooperation
• It covers all taxes including indirect taxes
• It covers assistance in recovery
• It is a flexible instrument: it allows for
reservations which can be withdrawn at a
later date
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Benefits: Multi-party co-operation (2)
• The Convention can be used for bilateral but also
multilateral simultaneous tax examinations (STE)
covering both direct and indirect taxes
• It can serve as an umbrella for multilateral exchange
of information on Aggressive Tax Planning schemes
(i.e. for JITSIC type initiatives)
• It can be used for regional co-operation: industry
wide exchange, STE, joint audits etc
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Benefits: use for VAT/GST purposes (3)
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VAT fraud and avoidance schemes tend to become
increasingly global and may involve more than two
countries (ex: carousel fraud)
Not all DTCs cover VAT/GST for exchange purposes
and amending DTCs takes time as compared to
joining the Convention
The Convention can be useful to identify missing
trader fraud, for tax audits concerning cross-border
supply of services and intangibles etc
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Wide range of Taxes covered
• Taxes on income or profits, capital gains, net wealth, both
local and national
• Compulsory social security contributions
• Estate, inheritance or gift taxes
• Taxes on immovable property
• General consumption taxes, e.g. VAT/GST
• Specific taxes on goods and services such as excise taxes
• Taxes on the use or ownership of motor vehicles
• Taxes on the use or ownership of movable property other
than motor vehicles
• Any other taxes except customs duties
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Extensive forms of cooperation
• Exchange of information (EoI) on request,
Spontaneous, Automatic exchange of information
• Simultaneous tax examinations
• Tax examinations abroad
• Assistance in recovery and measures of conservancy
• Service of documents
NB: Parties are not prevented from making use of
any other advance techniques for EoI, when their
domestic laws so permit , industry wide exchange
programmes or joint audits
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Limitations to provide assistance (1)
• Convention does not affect rights and safeguards secured to
persons by the laws or administrative practice of the requested
State
• Other limitations may include:
– measures at variance with the laws or administrative practice of either State
– measures which would be contrary to public policy
– information which is not obtainable under either State laws or administrative
practice
– trade, business, industrial, commercial or professional secret
– taxation by the applicant State contrary to generally accepted taxation
principles or to the bi-lateral tax treaty that may be in force between the
Countries concerned
– discriminatory treatment of applicant State
– applicant State has not pursued all reasonable measures available
– assistance in recovery where burden disproportionate to benefit
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Confidentiality
• Information shall be treated as secret and protected in the
receiving State in the same manner as information obtained
under its domestic laws.
• If personal data are provided, the Party receiving them shall
treat them in compliance not only with its own domestic law,
but also with the safeguards that may be required to ensure
data protection under the domestic law of the supplying Party.
• Information shall be disclosed only to persons or authorities,
and be used only for the purposes, indicated in the Convention.
They may however be disclosed in public court proceedings or
in judicial decisions relating to taxes covered by the Convention.
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Use of information received for non tax
purposes
• Information received by a Party may be used for other
purposes: e.g. to combat money laundering,
corruption, or terrorism financing when
• (i) such information may be used for such other purposes by the Party
supplying the information
• (ii) the competent authority supplying the information authorizes
such use:
This makes it a powerful tool for a whole government
approach to combat tax crimes and other financial
crimes
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Relationship with other instruments
• Possibilities of assistance provided by the Convention
do not limit, nor are limited by, those contained in
existing or future international agreements or other
arrangements between the Parties, or other
instruments that relate to cooperation in tax matters
• States are at liberty to choose whichever instrument
they think most appropriate to the particular case.
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Coordinating Body
• A Coordinating Body consisting of the competent authorities of
the Parties to the Convention ensures a consistent
implementation of the Convention, specifically:
– acts as a forum for the study of new methods and procedures to
increase international co-operation in tax matters;
– may recommend revisions or amendments to the Convention.
– assists the Parties by furnishing opinions on questions of
application or interpretation of the Convention
• Decisions to invite States (not members of the OECD or of
the CoE) to sign the Convention are taken by the Parties
through the Coordinating Body.
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Territorial application /
entry into force / date of effect
• Territories: Parties may specify the territory or territories to which
the Convention shall apply upon signature, when depositing the
instruments of ratification, accession or approval, or at a later stage
• Entry into force: first day of the month following the expiration of a
period of three months after a State expressed consent to be
bound.
• Date of effect:
– For civil tax matters, unless agreed otherwise by the
Parties, only in relation to future tax periods.
– For criminal tax matters, as soon as it enters into force,
and therefore also in relation to past tax periods.
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Reservations
• The Convention provides for the possibility to enter
reservations concerning :
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administrative assistance of any kind in respect of taxes other than
those on income, profits, capital gains or net wealth imposed at the
central government;
recovery of tax claims or administrative fines, including measures of
conservancy;
administrative assistance in respect of tax claims in existence before
the entry into force of the Convention;
the service of documents;
the use of postal services in the service of documents;
the date of effect of the Convention for criminal tax matters,
restricting it to taxable periods from the fourth year before the entry
into force of the Convention.
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
Process for Accession
• OECD/CoE countries can simply sign the Convention
• Non-OECD / non-CoE countries shall follow a specific
procedure:
– Send a Request to be invited to become a Party to the
Depositary of the Convention
– Complete a confidentiality questionnaire
– Depositary transmits the requests to the Parties
– Decision of the Parties through the Coordinating Body
– Invitation to become a Party issued
– Signature
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Multilateral Convention on Mutual Administrative Assistance in Tax Matters
GRACIAS
More information is available on the OECD website
www.oecd.org/ctp/eoi/mutual , including:
– The Convention available in English, French and Spanish and
Portuguese
– The Explanatory Report in English, French and Spanish
– Process to become a Party to the amended Convention
– List of Declarations, Reservations and other Communication
– Chart of signatures and ratifications
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