Exchange of Information for Tax Purposes

1. S. 95Introduction

Confidentiality in connection with tax matters may be approached from different perspectives: i) Privacy of taxpayers in the context of a tax investigation; ii) Professional secrecy, and iii) Confidential information communicated to or in the hands of the tax administration and whether such information may be disclosed to third parties (within or outside the country). In this respect, the focus of this work is exclusively on the latter point.

The importance of the exchange of information provision is well known in the sense that it fosters an efficient application of the tax treaty; however, particular attention must be given to the limits imposed and, above all, to the protection of the taxpayer’s interest. It is possible to say, therefore, that an efficient application of the tax treaty is not incompatible with a sound respect of the rights and interest of taxpayers. In this context, the subject matter to be covered through this paper is connected with the scope of the confidentiality rule incorporated in the second paragraph of Article 26 of the OECD Model. That is to say, to what extent the information received by the tax administration (from the other tax admini...