Exchange of Information for Tax Purposes

1. S. 75General Remarks and Historical Development of Article 26(1) OECD Model

It is undeniable that globalization and the enormous number of economic cross-border transactions have had a big impact in today´s world. Nowadays it is common that individuals and companies perform economic activities involving two, three or more countries. Unfortunately, the same global free trade and increased capital mobility have led to the increase of tax evasion. For this reason, since individuals and companies expand globally, and tax authorities struggle with national borders to tax, cooperation among states, especially of exchange of information, has acquired new relevance.

Exchange of information would bring benefits not only to governments but also to individuals. First, since it is almost impossible that governments control cross-border operations performed by their residents, tax avoidance follows as a consequence. For that reason, in order to obtain information regarding assets and incomes which have not been declared by investors, governments use information sharing to access relevant data in third countries in a legitimate way. Second, taxpayers who intend to properly estimate their tax liabil...