OECD – INTERNATIONAL EXCHANGE FRAMEWORK FOR MANDATORY DISCLOSURE RULES ON CRS AVOIDANCE ARRANGEMENTS AND OPAQUE OFFSHORE STRUCTURES. 1. Following the approval of the Model Mandatory Disclosure Rules (MDRs) by the OECD’s Committee on Fiscal Affairs and their release on 8 March 2018, Working Party No. 10 has developed the legal and technical information exchange infrastructure that is needed for the exchange of the information collected by tax administrations under the MDRs. 2. This note therefore sets out the international framework that would govern these exchanges, both from a legal and an operational perspective. 3. Part I of this note contains a draft multilateral Competent Authority Agreement for the exchange of MDR reports that has been modelled on the CRS MCAA. 4. In drafting the MCAA, an automatic exchange approach has been adopted, following the approach used for the CRS and CbC exchanges. This has been done in order to ensure that exchanges will be operationalised on the clear and unambiguous legal basis of Article 6 of the Convention and to provide clarity about the scope and periodicity of the exchanged information. The approach in the draft MCAA with respect to the information flows is that exchanges in principle are on a reciprocal basis between two jurisdictions that have implemented MDRs. This has the advantage that only jurisdictions that are familiar with the MDR and thus have a better understanding of the information will be receiving the information. It also provides an incentive for jurisdictions to adopt MDR to benefit from the automatic exchange network. 5. The basic premise for the automatic exchange flows under the draft MCAA is that a jurisdiction that received information about a CRS Avoidance Arrangement or Opaque Offshore Structure under the MDRs would exchange such information with all jurisdictions of tax residence of the Reportable Taxpayer(s), which are other MDR implementing jurisdictions and are signatories to the MCAA. This will allow tax authorities of such jurisdictions to use such information to carry out compliance activities permitted under the Convention with respect to such Reportable Taxpayers. 6. At the same time, the mandatory disclosure rules and the reciprocal automatic exchange contemplated by the draft MCAA will provide tax authorities information, which can be used to inform and foster their compliance activities in a collaborative manner. For instance, in addition to actions with respect to Reportable Taxpayers identified in the MDR reports, authorities may also consider: • exchanging information on intermediaries with other jurisdictions, where it is reasonable to suspect that such intermediaries have offered their services to taxpayers in such jurisdictions; • initiating further compliance activities with respect to the Intermediaries identified; • addressing group requests to the jurisdiction where the Intermediary is resident, in order to obtain information on other taxpayers that have relied on the services of the Intermediary (e.g. in case a particular Intermediary resident in another jurisdiction is identified in the MDR reports on multiple occasions); • carrying out coordinated compliance activities through the JITSIC network or other similar platforms. 7. To highlight such activities, the preamble of the MCAA addresses the possibility of enhanced co-operation between the Competent Authorities. 8. Separately from the exchange of information under this MDR MCAA, it is expected that tax authorities will also share generic intelligence they obtain on CRS Avoidance Arrangements or Opaque Offshore Structures pursuant to their domestic MDRs. The Secretariat could facilitate this by establishing a directory of such Arrangements and Structures, similar to the existing ATP Directory containing aggressive tax avoidance schemes. 9. Part II of the note contains the XML Schema and User Guide to support MDR exchanges, taking into account the information that is to be disclosed under Sections 2.1 and 2.3 of the MDRs.
OECD (2019), International Exchange Framework for Mandatory Disclosure Rules on CRS Avoidance Arrangements and Opaque Offshore Structures, OECD, Paris.
www.oecd.org/tax/exchange-of-information/international-exchange-framework-for-mandatory-disclosure-rules-on-crsavoidance-arrangements-and-opaque-offshore-structure.pdf
