“It is impossible for a financial centre to be able to have the capacity to identify for over a hundred different tax systems and laws what might be a transaction for tax avoidance purposes,” he said at the STEP Caribbean Conference.
This scenario should be subject to a bilateral agreement where such transactions are listed, he said, rather than “leave it to chance and guessing. You can only advance these types of reforms and methods of application if you are at the table, if you have sustained engagement”.
Pinder also pointed out that even the OECD protocol concedes account information should not be automatically exchanged with countries that cannot ensure that it is kept confidential and not used for unauthorised purposes. "We believe that an objective case can be made for many of our key markets that this clause would apply, resulting in a lack of a OECD mandate for an automatic exchange agreement with these countries", he said.
“Before entering into a reciprocal agreement to exchange information automatically with another country, it is essential that the receiving country has the legal framework and administrative capacity and processes in place to ensure the confidentiality of the of the information received and that such information is only used for the purposes specified in the instrument. Where this is not the case, automatic exchange is not “appropriate”.
In early May, Switzerland committed to the automatic exchange of tax information between jurisdictions in a declaration made at the OECD’s annual ministerial council meeting in Paris.
More than 60 countries and jurisdictions have now committed to early adoption of this level of agreed transparency, and additional Global Forum members are expected to join this group in the coming months, the OECD has said.
