Exchange of Information for Tax Purposes

1. S. 223Introduction

In the current business environment and global village era, tax administrations must extend their reach beyond the borders of their nations. In a globalized world, thus, international cooperation in tax matters has become a crucial issue. Cooperation is based on an extensive bi- and multilateral legal basis and takes the form of exchange of information, assistance in tax collection and delivery of documents.

In the past, it has been possible for taxpayers to hide income and assets from the tax authorities by taking advantage of bank secrecy or other impediments to information exchange. This should no longer be the case as cooperation between tax administrations is now becoming the rule. The threshold of tolerance for tax evasion has dropped to zero. In the context of the current crisis, governments require more tax revenue and citizens need to be reassured that the tax burden is being fairly shared.

The recent financial crises and banking scandals in the world have started a new debate on effective measures against tax evasion and the issue is placed at very high level in the political agenda of various countries and international organizations. At the London Summit in...