OECD/GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES – EXCHANGE OF INFORMATION ON REQUEST. HANDBOOK FOR PEER REVIEWS 2016-2020. This handbook is intended to assist the assessment teams and the reviewed jurisdictions that are participating in the Global Forum on Transparency and Exchange of Information for Tax Purposes (the Global Forum) peer reviews and non-member reviews on EOIR under the second round of reviews (2016- 20). It provides contextual background information on the Global Forum and the peer review process under the second round of EOIR reviews. It also contains the key documents and authoritative sources that are the basis of the Global Forum’s peer review process. Assessors should be familiar with the information and documents contained in this handbook as it will assist in conducting proper and fair assessments. This handbook is also a unique source of information for governments, academics and others interested in transparency and exchange of information for tax purposes. Background 1. Tax avoidance and tax evasion threaten government revenues throughout the world. Globalisation generates opportunities to increase global wealth but also results in increased risks. With the increase in cross-border flows of capital that come with a global financial system, tax administrations around the world face more and greater challenges to the proper enforcement of their tax laws than ever before. To meet these challenges, tax authorities must increasingly rely on international co-operation based on the implementation of international standards of transparency and effective exchange of information. Better transparency and information exchange for tax purposes are keys to ensuring that corporate and individual taxpayers have no safe haven to hide their income and assets and that they pay the right amount of tax in the right place. 2. The EOIR standard used during the first round of EOIR reviews in 2010 was primarily based on the 2002 Model TIEA and the 2005 version of Article 26 of the Model Tax Convention and Commentary1 . To ensure a level playing field and to respond to the G20’s call to draw on the work of the FATF on beneficial ownership, the Global Forum strengthened its EOIR standard for its second round of review by introducing the FATF concept of beneficial ownership in its assessments, along with other positive changes. The Global Forum adopted the revised Terms of Reference (2016 Terms of Reference) at its annual meeting in Barbados on 28-29 October 2015. 3. The 2016 EOIR Terms of Reference introduces a requirement that beneficial ownership information be available for EOIR purposes in respect of legal persons (e.g. companies, foundations, Anstalt and limited liability partnerships) and legal arrangements (e.g. trusts). The 2016 EOIR Terms of Reference remain based on 2002 Model TIEA, but now refer to the 2012 version of Article 26 of the Model Tax Convention and Commentary, which clarifies, amongst others, that requests on a group of taxpayers not individually identified (“group requests”) are covered under Article 26 of the Model Tax Convention, as long as the foreseeable relevance is sufficiently demonstrated. Other improvements have been introduced regarding the coverage of enforcement measures and record retention periods, foreign companies, rights and safeguards, and the completeness and quality of EOI requests and responses. 4. The first round of reviews was a great success with 125 jurisdictions being assessed and a total of more than 250 reports (phase 1, phase 2 or combined) published in the period 2010-16. Final ratings for [X] jurisdictions were adopted. During the first round of reviews, the reports have shown that the volume of requests has grown substantially – by some estimates more than 60 per cent. The use of EOIR is expected to increase following the implementation of AEOI, as AEOI will serve as a detection tool and EOIR will be required to build up cases against non-compliant taxpayers.
