Exchange of Information for Tax Purposes

1. S. 447Introduction

1.1. Importance of Spontaneous Exchange of Information

In many fields such as technology, business, and national defense as well as in tax it is particularly important to get information. If the tax authorities get more information this means that they can levy tax on more income without exemption, and that government can secure more budget. Thus, many countries have signed agreements to provide information among one another. Exchange of information is a very important issue, as more and more trade and transactions are taking place between states. In recent years, it has become increasingly important.

The OECD defines spontaneous exchange of information as the provision of information to another contracting party that is foreseeably relevant to that other party and that has not been previously requested. Because of its nature, spontaneous exchange of information relies on the active participation and co-operation of local tax officials (e.g. tax auditors, etc). Information provided spontaneously is usually effective since it concerns particular things detected and selected by tax officials of the state providing information during or after an audit or other type of tax...