Tax Information Exchange Agreements - Explained
What are Tax Information Exchange Agreements?
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What is a Tax Information Exchange Agreement?
Tax information exchange agreements (TIEA) was developed by the Organization for Economic Co-operation and Development (OECD). TIEA is a standard of exchange that provides information on civi tax matters or criminal tax investigation. TIEA renders services that aid international cooperation in tax related matters through the exchange of information. When there are requests for information on specific criminal matters such as tax evasion and tax related offenses, TIEA provides the exchange of such information. The OECD Global Forum Working Group on Effective Exchange of Information developed TIEA. Initially, TIEA is meant to provide exchange of information based on request but afterwards, it was expanded to an automatic process of Common Reporting Standard.
How Does a Tax Information Exchange Agreement Work?
Just like every other agreement, TIEA also contain certain provisions on tax information exchange. The basic provisions of TIEA are;
- Provision of information requested on a non-resident of a contracting party.
- Exchange of information that is relevant to the enforcement of domestic tax laws on Contracting Parties.
- Provision of information relating to a specific criminal or civil tax investigation.
- The information provided under TIEA is protected by confidentiality obligations. Disclosure of such information is permissible only in court or during tax investigation.
- No domestic interest for tax purposes is needed for TIEA to provide information.
- The information provided is comprehensive, it includes banking details, ownership details of companies, funds or trusts.