Automatic tax information exchange: list of countries. Automatic Tax Information Exchange Agreement

The process of combating offshore, initiated by the state, is carried out in order to protect the tax system from large companies evading taxes.

In the process of financial integration, very favorable changes have been made for interstate tax planning. It is impossible to completely exclude offshore activities, therefore, government officials and tax authorities are actively working to identify the real owners of offshore organizations and tighten control over financial transactions.

In order to return the withdrawn money back to the country from which they withdrew and tax them, the states began by carrying out an effective exchange of information on the actual owners of money in offshore.

ICAA Convention

One of the most important tools that helps to detect non-taxable foreign income is the Multilateral Competent Authority Agreement. Another important document is the OECD Convention on the automatic exchange of tax information.

It assumes that all acceding states undertake to transfer tax information to other countries party to the convention.

Types of information exchange:

1. The exchange of information upon request is applied in the case of conducting business with respect to a single taxpayer. Requests can be oral or written.
2. Automatic exchange of information. Implementation requires a bilateral international agreement.
3. Arbitrary exchange of information. A bilateral agreement is also needed here. But the initiator should be a state organization that has data on the taxpayer and which it considers it necessary to share.

The difference between the “exchange upon request” adopted by the convention in 1988 and the “automatic exchange” of this year

Exchange on request has some differences from automatic:

1. Data volume:

• The “on demand” exchange provides for the transfer from one state to another of financial information about a specific person or organization;
• “automatic” exchange allows you to provide a large amount of information about non-residents that are serviced by financial enterprises of the exchange participating country.

2. Information provided:

• “On request” can be provided any, supposedly important, information for governing bodies that ensures compliance with tax laws;
• “Automatically” only data on accounts of non-residents are transmitted, information on which is available at financial institutions.

3. Time and form of exchange:

• “Upon request” data are transmitted in writing in response to a request;
• “Automatically” data is transmitted electronically once a year.

Job responsibilities of tax services

During the process of transmitting and receiving financial information, tax authorities are required to:

• receive information from financial institutions of their state on the financial processes of legal entities and individuals who are residents of other MCAA member states;
• every year to transmit in electronic form the necessary information to the authorized bodies of these states;
• accept from authorized bodies of other MCAA member states data on accounts of legal entities and individuals who are residents of their country.

What organizations are committed to transmit data

In the automatic exchange of tax information involved:

• banks;
• Insurance companies;
• brokerage companies;
• other commercial financial organizations.

The following institutions do not participate in the automatic exchange of financial and tax information:

• government agencies;
• international organizations;
• central banks;
• state pension funds;
• other government organizations with a low level of risk, which can hardly be suspected of committing fraud in order to evade payment of taxes.

Accounts falling under data collection

Data will be collected on personal accounts of legal entities and individuals and accounts of corporations, trusts and private foundations.

If the account owner is listed as a tax resident of the state with which tax data will be exchanged, then he will fall under the automatic exchange. Such individuals will be referred to as “reporting entities”, and their accounts as “reporting accounts”.

The accounts of companies will also be accountable:

• if they are controlled by one or more “accountable persons”;
• if they are controlled by a "passive non-financial structure", which in fact is controlled by an "accountable person" (any organizational form of business, most of the income of which is generated by passive income, is holdings, funds, trusts).

Information to be exchanged

Based on the type of account, the following information will be collected and transmitted:

1. Personal data, address of residence, state to which the resident pays taxes, identification code, date and place of birth of the account holder.
2. The number of an open bank account.
3. The international identification number of the financial institution and its name.
4. The state and balance of the account at the end of the reporting year or the closing date of the account.
5. The total amount of accrued interest on the account.
6. Account currency and cash balance on the balance sheet.

"The principle of non-reciprocity"

When joining the MCAA Convention, any state has the right to follow the "Non-Reciprocity Principle". This implies that such a participating country undertakes to transfer financial information about the accounts of tax payers-residents of other states parties to the Convention, but will not receive from them data on its own taxpayer residents.

The essence of this principle is the interest in not complicating things that are already so complicated: some offshore processes provide for the complete non-payment of taxes, and for the state this information from other countries is useless.

Penalties for violations in the provision of information

When submitting a request to a financial institution from a foreign authorized organization for providing information, before giving an answer, the financial institution must notify the local tax authority and provide information that is necessary for the foreign organization. The term for the transfer of information is ten days. The tax authority has the authority to prohibit the transfer of this information.

In case of violation by the financial institution of the tax ban penalties are provided:

1. For an arbitrary unjustified refusal of an institution to provide information on taxes and accounts of individuals and legal entities or to provide information, but with violation of the order, volume and terms, a fine of about 500 thousand rubles will be charged.
2. If the financial institution does not take measures to establish the tax residence of the client, a recovery of 300 thousand rubles is made from him.
3. If one of the international groups of companies has not notified of participation, a fine of fifty thousand rubles will be charged.
4. For the unjustified non-provision by a member of a group of any data or the provision of false data, sanctions are imposed in the amount of one hundred thousand rubles for each of the list of information.

Pros and cons of sharing information

Automatic exchange has both advantages and disadvantages. Plus, for example, this: you do not need to send a request for information about offshore. Data is automatically supplied to the state, which is regulated at the legislative level and reduces working time.

Less: financial and tax data are very easy to hide, especially if the funds are outside the applicant state. Therefore, it is necessary to develop new regulations, laws, conduct business monitoring and verify the entire banking system.

International automatic exchange of tax information is fraught with risks. For example, there is a risk of incapacitation of small and medium-sized businesses.

List of States committed to the exchange of information

According to the ISAA Convention, the following are obligated to participate in the automatic exchange of information:

• from September 2017, automatic exchanges should begin: Anguilla, Argentina, Barbados, Bermuda, Belgium, Bulgaria, the British Virgin Islands, Hungary, Great Britain, Germany, Gibraltar, Greece, Greenland, Guernsey, Jersey, Denmark, Ireland, India, Spain , Italy, Iceland, Cyprus, Cayman Islands, South Korea, Colombia, Curacao, Luxembourg, Liechtenstein, Lithuania, Latvia, Montserrat, Malta, Mexico, Netherlands, Norway, Niue, Isle of Man, Turks and Caicos Islands, Portugal, Poland, Romania , Seychelles, San Marino, Slovenia, Words cue, France, Faroe Islands, Finland, Czech Republic, Croatia, Sweden, South Africa, Estonia;
• From September 2018, the AONI should be implemented by: Austria, Australia, Andorra Albania, Aruba, Antigua and Barbuda, Belize, Grenada, Ghana, Indonesia, Israel, China, Canada, Costa Rica, Mauritius, Marshall Islands, Monaco, Malaysia, New Zealand, Nauru, Cook Islands, Russia, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and the Grenadines, Sint Maarten, Samoa, Switzerland (the country, according to media reports, postpones automatic tax information exchange until 2019), Chile, Japan.

This is official data. The automatic exchange of tax information (list of countries above) should be fully introduced by 2019.

Automatic exchange of tax information in Russia

In May 2016, the Federal Tax Service of Russia signed an international agreement on the automatic exchange of information on financial accounts at the Forum "Organization for Economic Cooperation and Development in Tax Administration" (OECD). The beginning of such practice in Russia is scheduled for September 2018.

In addition to general ones (signing an agreement on the automatic exchange of tax information), it is envisaged to sign a number of other tax treaties on cooperation and the exchange of information to combat tax evasion, as well as mutual assistance agreements between states in combating violations of tax laws. These usually involve the transfer of data on registration of taxpayers, on accounts, crediting additional income and other tax information to them. Countries that automatically exchange tax information are committed to do the same.

What is necessary for automatic exchange with other countries

In order for Russia to send evidence to the Convention that the Russian Federation can fully participate in the exchange of data, the state needs to take a few more steps to start the system:

1. Adopt a law on automatic transmission of information at the state level.
2. Develop a personnel policy, means for implementing processes on the ground.
3. Develop coding systems and a package of government documents for data transfer.
4. Provide reliable protection of transmitted information, encoding.
5. Ensure complete privacy, data security.
6. Create a list of those states with which the Russian Federation wishes to cooperate in the field of exchange, that is, exchange financial information.

The country needs to fulfill many requirements in order to become a party to the Agreement on the automatic exchange of tax information (Latvia, Switzerland and all other states are also obliged to adjust their legislation to general requirements).

The Russian Federation is fully prepared for the changes. Russia will soon be able to carry out an automatic exchange of tax information. By itself, AONI is certainly beneficial for participating States. For example, Russia passes data on its tax residents to other states, which the Russian Federation itself has already taxed with income taxes. And in return, she is provided with data on all her tax residents who have accounts abroad, that is, supposedly income to the state budget.

How does automatic exchange threaten citizens?

If the corporation has an offshore account that it is trying to hide, it can:

1. Lead to problems and sanctions for an undeclared account.
2. Significant fines may apply for tax evasion.
3. It is illegal to lead to big problems due to foreign exchange operations (fines, prohibition of the company’s activities, deprivation of a license, etc.).

Finally

So, it will be fair to conclude that in 2018 our financial processes will practically become visible through and through and we can already forget about bank secrecy. Almost any financial activity on the accounts falls under the automatic exchange: balance change, personal information and other personal data.

True, for those who withdraw their income to offshore accounts, with the automatic exchange of tax information, there will be much fewer opportunities to do this in the future - which, of course, is a good plus. That is why businessmen and individuals should clean up their bank and other accounts in order to avoid future problems with tax authorities.

Russia is quite ready for the automatic exchange of tax information with other countries. It remains only to finally determine the technical and personnel resources. The rest is the work of world politics.