THE international
community continues making progress toward greater cooperation to ensure
effective information exchange in tax matters. The Global Forum on Transparency
and Exchange of Information for Tax Purposes issued yesterday 12 new reports
that highlight action being taken by jurisdictions to implement the international
standard for exchange of information on request.
Four Phase 1 reports were published assessing jurisdictions’ legal and regulatory
framework for transparency and exchange of information. Colombia, Latvia, and
Saudi Arabia qualify for the next stage of the review process, while the peer
review of The Federated States of Micronesia (FSM) determined that the jurisdiction
does not have in place a legal framework for transparency, and therefore does
not qualify for a Phase 2 review.
The review of FSM was conducted under the special procedure for non-members,
which ensures that jurisdictions do not gain a competitive advantage by refusing
to implement the international standard or participate in the Global Forum. The
FSM was identified in 2012 as a relevant jurisdiction for the Global Forum’s
work, due to development of a captive insurance industry.
The Global Forum published Phase 2 reports - which review exchange of information
practices - in four jurisdictions and allocated ratings for compliance with the
individual elements of the international standard as well as an overall rating.
Barbados received an overall rating of “Partially Compliant,” due, in part, to
gaps in its network of agreements to exchange information, Malaysia and the Slovak
Republic received an overall rating of “Largely Compliant” and Slovenia was rated
Compliant.
Four supplementary peer review reports were also published, assessing progress
made by jurisdictions to address gaps identified in their legal frameworks and
exchange of information practices since their previous reviews.
After substantial changes to implement Global Forum recommendations, Botswana
and the United Arab Emirates are no longer blocked from moving to the next Phase
of the peer review process. Mauritius is also shown to have implemented recommendations
made by the Global Forum, and maintains an overall “Largely Compliant” rating.
The supplementary report on Panama points to several improvements in its legal
framework, but concludes that further progress is necessary in a number of areas
before it is able to qualify for a Phase 2 review.
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