Due to the growing concern with tax evasion, and given the insistence of G20 leaders to strengthen action against tax avoidance and enhance greater trust and fairness into the international tax system, Malta and other financial jurisdictions now have to follow a new single global standard on Automatic Exchange of Information.
Automatic Exchange of Information, referred to as Routine Exchange by some jurisdictions, involves the systematic and periodic transmission of “bulk” taxpayer information by the source country to the residence country concerning various categories of income, such as interest, royalties, dividends and salaries. This system can also be used to transmit other useful types of information, such as changes of residence and disposition of immovable property.
The OECD said that the standard “sets out the financial account information to be exchanged, the financial institutions that need to report, the different types of accounts and taxpayers covered, as well as common due diligence procedures to be followed by financial institutions.”
“Globalization of the world’s financial system has made it increasingly simple for people to make, hold and manage investments outside their country of residence,” said Angel Gurría, secretary general of the OECD, in a statement. “This new standard on automatic exchange of information will ramp up international tax co-operation, putting governments back on a more even footing as they seek to protect the integrity of their tax systems and fight tax evasion.”
The standard will be formally presented to the G20 leaders for their endorsement on the 22nd and 23rd of February in Sydney, Australia.