As part of the project to rewrite global tax rules, the Organization for Economic Cooperation and Development (OECD) released commentary on Common Reporting Standards, a milestone in the effort to help countries implement an automatic exchange of information (AEOI) regime. AEOI would allow governments to automatically collect financial data from banks for tax purposes.
USCIB and the Business and Industry Advisory Council (BIAC) support OECD and G20 efforts to ensure taxpayers pay what they owe and appreciate the need for automatic exchange of information. The OECD must continue working with the private sector to ensure that the costs borne by businesses are taken into account and that business will need time to adapt systems to the AEOI requirements.
In September 2013, G20 leaders committed to AEOI as the new global standard of cooperation between tax administrations and supported the OECD’s work aimed at presenting a single global standard. Progress made on that front this year will go a long way toward implementing the policies necessary for identifying customers’ tax residences and exchanging relevant information between tax authorities.
Countries’ implementation guidance must also provide business with sufficient time to implement the significant new obligations that will be imposed on business by the common reporting standard.
“BIAC is particularly pleased that the business community, the OECD and its member governments were able to engage in a consistently frank and open dialogue that led to a result that reduced the potential burdens on business while achieving the OECD’s tax compliance objectives,” said Will Morris, chair of BIAC’s Taxation and Fiscal Policy Committee. “This dialogue must continue if the CRS is to be implemented consistently by the adopting jurisdictions.”
The Common Reporting Standard is based on a similar information-gathering program developed by the United States, the Foreign Account Tax Compliance Act (FATCA). That U.S. policy acted as a catalyst for the move towards AEOI in a multilateral context.
Staff contact: Carol Doran Klein