Exchange of Information for Tax Purposes

1. S. 567 Introduction

In recent years, the legal protection of taxpayers has acquired a lot of importance, since the world is changing and nowadays it is very common that taxpayers carry out activities in and economic transactions with different states around the world. Consequently, in many cases taxes are trigged in a different state than the residence state of the taxpayer. For those reasons and due to the fact that most states tax on a worldwide basis, states need to obtain information from abroad so that they can tax their residents in an efficient and correct way. This is explained by Schenk-Geers:

‘The world has become a ‘global village’, in which the economies of states become ever more closely intertwined. Parts of the world income or profits of taxpayers will increasingly find their origin in states other than their state of residence or will be strongly influenced by facts and circumstances abroad. This leads to an ever-increasing need of states to obtain tax-related (counter) information from abroad. However, basic premises of international law such as sovereignty and subsidiary prevent states from operating independently within jurisdiction of other states.’

The insatiable thi...