Criticism of information exchange agreements
With the first major economic crisis of the 21st century there is a need for the fight against tax havens, an international consensus, the increase in transparency levels and information exchange between countries and the fight against tax evasion, they are currently, an international shared priority. The Organization for Economic Cooperation and Development (OECD) is the International Reference Agency in the field of International Taxation, which recurrently possible possible ways of strengthening this struggle.
There is a new battle against tax fraud and the current economic and financial context that has been related to opacity and the deregulation of fiscal paradises and centers.
Tax Administrations will be responsible for fighting international tax fraud and information exchange.
Information exchange agreements (AII), are international agreements between two countries or territories for which they are committed to providing assistance in the exchange of fiscal information between their corresponding tax administrations.
Globalization, refers to the growing interconnection or reciprocal economic interdependence between the countries of the world.
It is important for the states to obtain the necessary information to verify compliance with the tax obligations of taxpayers who are subject to taxation for their world income and who have investments or carry out operations abroad.
The exchange of information is the essential element of international cooperation in Mateira Prosecutor. Countries maintain their sovereignty about their own trubutarian bases and ensure the correct allocation of the rights to imposition with the countries with which they sign tax agreements.
In Spain, the new line of action has been put into practice on the basis of the work carried out by the OECD in this matter, and the result of it, are the legislative modifications and the signed Aii.
The AII are not only a taxpayer control instrument that carry out international economic operations, but also are an instrument to channel the interests of the taxpayers. Taxpayers may benefit from the tax advantages that exist in states other than the State of their residence, urging its tax administration, to provide or verify necessary data for the application of said advantages or regimes. From the point of view of the taxpayer, it implies an instrument for mutual administrative assistance, which can have the purpose of receiving the tax treatment that adapts to its circumstances.
It can be identified as fiscal paradises, those jurisdictions of a state or understeatal nature, with low or non -existent taxation levels, in which economic operators enjoy anomimate that provide bank, commercial and professional secrecy.
The international body that has dealt with the exchange of tax information is the OECD. They tried to identify and eliminate tax regimes and identify tax havens, trying to implement the principles of transparency and information exchange.
The OECD published a report in 1998, called the harmful fiscal competence: a global problem, where one of the reasons why harmful fiscal practices were unleashed was the absence of the exchange of information were revealed. It also included a recommendation to combat harmful fiscal competence through unilateral, bilateral and multilateral measures. The need to develop a legal instrument that could be used to establish an effective information exchange, serving as a legal basis for exchange and that at the same time, would protect the confidentiality of taxpayers, avoiding the use of ETA information for unauthorized purposes,.
The main objective is to establish a channel to exchange information in tax matters between administrations, as well as promote international cooperation and administrative relations. In addition, it seeks to strengthen the legal security of international relations related to taxes referred to.
The AII model is only a way for the exchange of information, which is the fundamental objective.
Regarding its nature, pointing out that information exchange agreements are information exchange agreements are international agreements between two countries or territories. In Spain they have a legal nature of international treaty, so that once ratified and published, they are part of the internal legal system of each country.
The specific content will depend on the terms finally agreed by the parties (required status and required status) are committed to providing assistance in the exchange of information in fiscal matters, in accordance with the provisions of this agreement.
The model only contemplates the route of information exchange prior petition. Therefore, it will be necessary that there have previously been a singularized request from the other contracting party, the indiscriminate information requirements being excluded. Although it is expected that the range of exchange is as wide as possible, information requests that do not have a link with an open investigation are not allowed.
Contracting parties may agree.
In any case, the “principle of subsidiarity” must.
Another basic principles in relation to the exchange is that of the “principle of reciprocity”, based on which, the requesting part may only require that information that it can by law obtain or facilitate. The required part will not be obliged to facilitate the information that is not held by its authorities, or that is not under the control of people in their territorial jurisdiction.
When you should exchange information, the so -called "domestic interest principle" is not admitted, so it will be obliged to use all the means available to collect the requested information, despite the fact that the obtaining and provision of information only outsideutility for the requesting part.
The model eliminates the principle of double incrimination in criminal matters, so that the exchange of information must be produced, regardless of whether or not the behavior of the investigation is a crime according to the legislation of the required part. The exchange of information is mandatory for matters of civil or criminal nature.
There is an obligation to exchange information, data related to de facto or law issues related to a person or a set of people. The "content" of the information that is exchanged is also widely defined, covers data, requests, statements.
The parties may determine the taxes that are affected by the agreement. Bilateral agreements generally include all direct tax categories. The agreement automatically applies to all taxes of "identical nature" and if the parties agree, also to the taxes of "analogous nature".
Bank secrecy is not incompatible with the effective exchange of information, that is, it is intended that information must be exchanged even when there is an internal norm that covers bank secrecy. The competent authorities must have the authority to access through a judicial or administrative process to the information held by banks and financial institutions. A massive information exchange is not foreseen, but certain administrations will raise their bank secrecy when there are indications of fraud, require information of this nature the other country.
The model establishes a maximum period for the exchange of information and the consequences of breach of said period are regulated. Thus, when the requirement is received, the required part will communicate to the applicant within 60 days the reception of the petition and, where appropriate, the defects of the same if there are any. If in 90 days the required part does not obtain the requested information, it will communicate it to the other party, detailing the reasons for its refusal or its impossibility to obtain the requested information, it will communicate it to the other party, detailing the reasons for its refusal or itsImpossibility to obtain the required information, or where appropriate, an estimate of the time that submits to obtain the requested information (extension).
Article 6 includes the possibility of carrying out tax inspections abroad, contemplating two possibilities:
- Interviewing people and examining documents, prior written requirement of them and consent of the country or territory where such actions are going to be carried out (active inspection).
- Authorization by the required part of admitting the presence of representatives of the foreign competent authority during a fiscal inspection carried out in its territory (passive inspection).
Certain cases exim. The possibility that the required part can refuse a requirement is regulated when the reciprocity principle is not met. It is not obliged to collect or provide information that was not in a position to obtain the requesting part by virtue of its own legislation, for the purposes of the administration or the application of its tax legislation. The denial of an information request is also anticipated, when it involves reveal.
The possibility of refusing a request for information is defended when it entails the discrimination of a required citizen of the country, is the "principle of non -discrimination".
Article 8 is included in the confidentiality of the information received. The “fiscal secret” must be guaranteed, so that it can be communicated exclusively to the persons and authorities involved in the management or collection of taxes included by the agreement and can only be used for the purposes for which it was exchanged. You can communicate to other persons, entities, authorities or jurisdictions when obtained with the written consent of the required part.
The reimbursement of the costs incurred by the State required in obtaining the information, is open and must be agreed between the parties when the agreement is signed.
The language for the formulation and response, would have to be determined by mutual agreement by the parties.
Finally, as in the CDIs, the friendly procedure articles, entry into force and termination of the agreement are collected.
The consideration of fiscal paradise in the Spanish internal norm, was given by the mere fact that the country or territory in question was included in the list of tax havens approved by Royal Decree 1080/1991, of July 5.
All operations carried out with these countries or territories, are affected by the anti -weather standards distributed throughout the articles of the Spanish internal regulations, which basically consist of an aggravation of fiscal treatment applied to the operations carried out with those countries or territories. That is, given the lack of information regarding the operations carried out in, from or with said countries or territories, the Spanish legislator applies "anti -paradise measures".
It was a closed list and the lack of review of the list could generate situations in which countries or territories included in the list could have modified their fiscal system, so that later at the time of US promulgation, its inclusion andvice versa, that is, countries or territories not initially included, they would later deserve such qualification.
After the promulgation of the list, the Spanish authorities denoted the need both to harden the treatment of the operations carried out from the paradises and especially the importance of knowing the operations and income generated in fiscal paradises. The need to exchange information with them was assumed by Spanish authorities.
“The countries and territories that sign with Spain an agreement for the exchange of information on tax matters or an agreement to avoid the double imposition with information exchange clause would cease to be considered tax havens, at the time when said agreements oragreements entered into force ".
The regulation related to tax havens presents two novelties:
- That a new condition to get out of the list is added and it is to expressly record in the agreement in which it is signed, that this country or territory ceases to be considerate of fiscal paradise.
- It serves to clarify that these countries or territories will recover again the status of fiscal paradise in the event that the agreements or agreements cease to be applied. So that the text allows "acting" in two temporal moments: in negotiation and application.
Consequence of this new approach is the birth of two concepts: "no taxation" and above all "effective exchange of information", since at international level the key concept in the fight against tax havens will be the existence of an exchange of informationThat is effective.
The concept of "no taxation", is a completely new concept in our order. It is considered that in a country or territory, there is void taxation, when an identical or analogous tax on the Income Tax of natural persons, to the Income Tax Corporation of Non -Resident Income Tax, as appropriate as appropriate, as appropriate, as appropriate, as appropriate, as appropriate, as appropriate, as appropriate, as appropriate, as appropriate.
As for the concept of “effective information exchange”, it is considered that there is an effective exchange of information with a country or territory when it is application:
- An agreement to avoid double taxation, with information exchange clause. With this wording, the legislator achieves a double objective:
- Ensure that with the countries with which we have signed CDIs, there is an "effective information exchange".
- Get the CDIs that are signed in the future, some of which could be negotiated with countries or territories considered as fiscal paradises, contain clauses that ensure an adequate level of information exchange.
- An information exchange agreement provided that it is expressly established in the same as the level of information exchange exchange is sufficient for the purposes of this provision.
The objective is that in the future, although there is still a long way to walk in this regard, it is the internal norm of each tribute that can be sent to these concepts, when it comes to appearing anti -abuse clauses, with respect to the operations carried outwith countries or territories that the taxpayer has chosen for his null taxation or for his limitations regarding the existence of an effective exchange of information. The purpose is that each tax and each article specifically of the Spanish internal regulations, where these concepts are used.
It will be the director of the State Agency of the Tax Administration who may determine the countries or territories with which there is an effective exchange of information.
The Spanish authorities consider that the signing of an information exchange agreement with a fiscal paradise is an appreciable advance in terms of the instruments for the prevention of fiscal fraud in relation to economic flows towards it and not only that but it grants aconsiderable deterrence for fraudulent operations related to this type of jurisdictions.
In line with new trends internationally, Spain has maintained an active negotiation policy of AII years.
An order of priorities has been established for the negotiation of the AII, giving primacy to those paradises or territories that have international activity, interest in negotiating, appropriate tax system to guarantee an exchange of sufficient information and that are involved, in a wayrelevant to the Spanish Public Treasury, in economic-financial relationships in which Spanish taxpayers participate.
The AII that Spain has signed are signed with countries or qualified territories as tax havens, in which the low real investment and the lack of homogeneity of its tax systems compared to ours, force it to do so
However, at present, the existence of some countries or territories included in the list of tax havens is appreciated that, although years ago they had reasons to be included in a closed list, today they are characterized by having considerable international activity, for having internal legislation according to international standards and for having assumed before the OECD the transparency and information exchange commitments. In those cases, the current trend is to negotiate with these countries a CDI that incorporates a protocol in which the principles collected in the AII model are basically developed.
Advances in international exchange of information to invite fiscal fraud, have been important in recent years. From an inoperative system, it has passed to an active model and with great potential, because it not only involves the affected states, but international technical institutions and political institutions, are immersed in a process of fighting fiscal parishes and implementation of implementation ofPrinciples in fiscal transparency.
Therefore, this stage we live, has been baptized as "the beginning of the end of paradises, their bank secret and their opacity in the exchange of information". The current crusade has a political and large -economic origin, since they have contributed to the current economic crisis. The reform and restoration of the economic situation worldwide, become substantially reducing the opacity of these countries.
Today, information exchange is a worldwide priority.
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