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New OECD standard for automatic exchange of information

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The OECD has released the full version of a new global standard for the exchange of information between jurisdictions. The new standard calls on governments to obtain detailed account information from their financial institutions and exchange that information automatically with other jurisdictions on an annual basis. More than 65 countries and jurisdictions have already publicly committed to implementation. OECD secretary general Ángel Gurría said: ‘[This] launch moves us closer to a world in which tax cheats have nowhere left to hide.’

Jayne Newton, tax investigations director at DLA Piper, said the new standard ‘revealed another important piece of the jigsaw in the development of international tax transparency. The commentary builds on FATCA, but there are a number of important differences that need to be accommodated by financial institutions.  Whilst the management of the legal and regulatory risks are critical, financial institutions also face commercial challenges when implementing compliant processes and procedures in addition to considering the impact on customer service.’

Separately, the EC is calling for applications for its new expert group on the automatic exchange of financial account information. The new expert group will provide advice to allow the Commission to assist the Council and member states to ensure that EU legislation on automatic exchange of information in direct taxation is effectively aligned and fully compatible with the OECD global standard on automatic exchange of financial account information. The deadline for the submission of applications is 8 August 2014.