TRADE & FINANCE
CREATING THE
FRAMEWORK
FOR CROSS
BORDER TAX
ROBERTO BERNALES
International tax consultant
and Professor of Tax Law
of the University of Deusto
22
A long way has been walked
since 2009 when the new era in
tax exchange of information started.
Today there seems to be consensus
between most jurisdictions in the
world on the steps take n and the
work developed by the Global Forum
on Transparency and Exchange of
Information and the OECD, and their
implementation in the next future (i.e.
the implementation of the exchange of
information on request (EOIR) standard
by 2017, and the automatic exchange of
information (AEOI) standard, meaning
the common reporting standard, CRS,
referred to financial information, by
2018. Further, jurisdictions signing
the multilateral Convention on Mutual
Administrative Assistance in Tax
Matters and the multilateral Competent
Authorities Agreement for the CRS,
as the complementary tool needed
to facilitate the practical application
of the Convention, are increasing thus
making it possible the establishment
of a robust tax transparency framework.
However, to enable a real cross-border
tax transparency some elements should
be strengthened and other elements
should be included in the current
framework.
The AEOI should be expanded
not only to financial information
and country by country reporting
but also to beneficial ownerships.
It is clear that the implementation
of the beneficial owner information
standard is not working properly.
Further, in too many cases trusts,
foundations and other similar
arrangements seem to be out of the
set of rules created to guarantee tax
transparency. A common approach to
this issue from common law and civil
law jurisdictions, avoiding the existing
reluctances between them, is needed in
order to guarantee real tax transparency.
If we want the legal framework to be
more than a formal structure that can be
easily avoided, a step forward should
be taken in order to implement a system
where tax authorities shared their tax
rulings provided to their multinational
taxpayers (in line with the new EU
directive). Experience shows that the
lack of transparency on tax rulings can
be exploited by certain companies to
reduce their fair tax contribution, with the
complicity of some governments which
play a disloyal role to the international
community and, even worse, to their
own taxpayers.