Tax Information Exchange Agreements Australia

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Tax evasion at sea undermines the fairness and integrity of the Australian tax system. Moreover, in the era of globalization, the willingness of other Governments to exchange information is an important element in the implementation of national tax legislation. Under the TIEA, contractors must have a legal and administrative framework in place to support their obligation to exchange information. For example, the ability to exchange information cannot be hindered by restrictions such as bank secrecy laws or a restriction, only to obtain and exchange the information necessary for their national tax administration. Legal systems may also choose to use the text of the articles of the Model Protocol if they wish to include in a new TIEA the provisions on the automatic and spontaneous exchange of information. Jersey has signed a number of TIEAs based on this OECD model that allow us to send and receive tax information with more than 30 countries. This figure is expected to increase over time. Each TIEA describes the obligation between Australia and the non-OECD partner to assist each other by exchanging correct tax information relevant to the management and enforcement of their respective national tax laws (civil and criminal). Information can only be provided upon request, which means that one court is not required to provide information that has not been requested by the other court.

It is important that there are certain exceptions to the provision of information in Australian TIEAs (which are generally the same as in the standard contract). Australia`s TIEAs impose no obligations on either jurisdiction: the agreement was born out of the OECD`s work to combat harmful tax practices. The lack of an effective exchange of information is one of the key criteria for determining harmful tax practices. The agreement is the standard for an effective exchange of information within the meaning of the OECD Initiative on Harmful Tax Practices. The commentary on the model agreement indicates, with regard to the `relevant foreseeable` standard, that the agreement is limited to the exchange of foreseeable information for the management and enforcement of the applicant Party`s legislation concerning the fees covered by the agreement. The standard of foreseeable relevance should allow for the fullst possible exchange of information in tax matters, while clarifying that the parties are not free to participate in fishing expeditions or to request information that may not be relevant to the tax affairs of a given taxpayer. . The Organisation for Economic Co-operation and Development (OECD) has developed a process for certain legal consultations of offshore financial centres outside the OECD to commit to eliminating harmful international tax evasion and tax avoidance. These jurisdictions can do this by signing Tax Information Exchange Agreements (TIEAs) with OECD member countries and jointly engaged jurisconsultations called “participating partners”.