Worldwide Exchange of Tax Information: OECD Expands upon FATCA to Add New Requirements

December 17, 2014

While the Foreign Account Tax Compliance Act (FATCA) has focused worldwide attention on U.S. efforts to create a mandatory cross-border exchange of tax information, the enactment of FATCA was not an isolated occurrence. For more than a decade, the Organisation for Economic Co-operation and Development (OECD) has been trying to obtain a multi-country agreement under which countries would exchange tax information about their residents. In late October of this year, the OECD obtained the agreement of 51 countries, dependencies and territories throughout Europe, Asia, Africa and North and South America (now 52 – collectively, Information-Sharing Jurisdictions) to share tax information among themselves about their residents, starting in 2016 and 2017. The OECD initiative represents a global implementation of cross-border tax sharing that was pioneered by FATCA. More details need to be released on this OECD plan and further work is required to integrate it with FATCA, but in the interim, financial institutions should begin to take a broader view of their tax compliance efforts.

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