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Time to implement global and European
standards on banking secrecy and the
exchange of information for tax purposes
The international community planned to imple-
ment the new OECD standard on international
tax cooperation, based on the automatic ex-
change of information (AEOI) about bank ac-
counts, during the course of 2017 and 2018.
Almost all EU Member States, with the exception
of Austria, applied AEOI in 2017, becoming “ear-
ly adopters” of the Common Reporting Standard
(CRS),
1
the name of the new OECD global stand-
ard in this area. This replaces the previous global
standard, which was based on the exchange of
tax information on request.
The new CRS means that banks which pro-
vide accounts to residents of other jurisdictions
are obliged to transmit information regarding a
wide range of incomes to their tax authorities.
1
The CRS was approved by the OECD in June 2014 and
ratified by the G20 in September of the same year.
In a second moment, this tax authority must
– on a regular basis and without the require-
ment for any specific request – transfer the said
information to the state of residence of the ac-
count holder. It is essential for the state to have
access to this data to identify whether its tax-
payers with accounts in other countries are in
compliance with their tax obligations.
With respect to the first part of the CRS –
the reporting obligations of financial institutions
to their local tax authorities – it is important to
note that this implies a parallel need to identify
those accounts affected by automatic exchange
and, where applicable, those individuals who
control intermediary bodies or structures (for
example, current accounts in the name of off-
shore companies, foundations or trusts).
Furthermore, this must comply with the relevant
“due diligence” procedures. As we will see, the
issue of the availability of information about the
real beneficial owners intermediary structures ex-
ist is essential for AEOI to be effective. With re-
spect to the part of the CRS which affects tax au-
thorities, the standard contains amodel agreement
Current status of
the fight against tax
havens in Europe
José Luis Escario Díaz-Berrio