In series:Global Forum on Transparency and Exchange of Information for Tax Purposes: Peer Reviewsview more titles
Published on November 04, 2016
This report contains the 2014 “Phase 2: Implementation of the Standards in Practice” Global Forum review of Brunei Darussalam.
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by over 130 jurisdictions which participate in the work of the Global Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review of the implementation of the standards of transparency and exchange of information for tax purposes. These standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004, which has been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party. “Fishing expeditions” are not authorised, but all foreseeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard.
All members of the Global Forum, as well as jurisdictions identified by the Global Forum as relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined – Phase 1 plus Phase 2 – reviews. The ultimate goal is to help jurisdictions to effectively implement the international standards of transparency and exchange of information for tax purposes.
The Phase 2 review rates Brunei Darussalam overall as largely compliant with the international standard. Brunei Darussalam’s legal framework ensures that ownership information, accounting and banking information is available and can be obtained in line with the standard, although some deficiencies have been identified in relation to oversight of obligations to maintain information in practice. Brunei Darussalam is recommended to ensure that the monitoring and enforcement of ownership and accounting information is strengthened. Brunei Darussalam has taken action to address key recommendations made in its Phase 1 peer review regarding allowing Brunei Darussalam’s authorities to have the power to obtain and provide information in accordance with the standard. However, Brunei Darussalam should ensure that its domestic law provisions regarding confidentiality or secrecy duties, in particular regarding access to information on international trusts, do not prevent effective exchange of information for tax purposes. In practice, Brunei Darussalam had made efforts to bring its EOI agreements into force expeditiously. Brunei Darussalam should continue to respond to all requests to negotiate EOI agreements (regardless of their form) in a timely manner. Finally, Brunei Darussalam has created a dedicated unit and a detailed process to manage exchange of information requests, however this has not been tested in practice. For further information on Brunei Darussalam’s legal and regulatory framework in the field of transparency and exchange of information and its implementation in practice please access the full report here.