In series:Global Forum on Transparency and Exchange of Information for Tax Purposes: Peer Reviewsview more titles
Published on October 29, 2014
This report contains the 2014 “Phase 2: Implementation of the Standards in Practice” Global Forum review of Gibraltar.
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 120 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 Gibraltar as overall largely compliant with the international standard. Gibraltar has amended its law to address the Phase 1 deficiencies identified however small deficiencies remains in relation to lack of penalties in the amendment of the Partnership law and partnerships are not subject to systematic oversight of compliance with their accounting obligation. In addition, the obligations to maintain accounting records in accordance with the standard only came into force in 2013 and so the effectiveness of these amendments could not be fully assessed. Further, a gap was identified concerning the systematic disclosure to third parties information that is not needed to obtain information requested. While mechanisms in Gibraltar allow for effective exchange of information to a large extent, the report identifies some deficiencies concerning EOI with one of Gibraltar’s Competent Authorities. It is recommended that this competent authority ensures better communication with its main EOI partner and improve its current systems to ensure that EOI is dealt with effectively and efficiently. For further information on Gibraltar’s exchange of information practices click here.