2019 represents a further strengthening year to increase international tax transparency through AEoI
The Organisation for Economic Cooperation and Development (OECD) on 26th and 27th November 2019 held the Global Forum’s 10th Anniversary Meeting in Paris.
The OECD expressed in her “Statement of Outcome”, that through voluntary disclosure programmes and tax investigations the Global Forum members have since 2009 already identified USD 110 billion in additional revenues (tax, interest, penalties).
Participants calling for further measures to strengthen the effectiveness of the Global Forum’s transparency standards.
Participants also expressed interest in the Global Forum exploring possible areas of international tax cooperation the use of tax information to tackle illicit financial flows and virtual assets.
The 2019 AEoI Implementation Report
With the 2019 AEoI Implementation Report the OECD released further details about the implementation of the AEoI Standard and provide an outlook on future planned activities.
The AEOI Standard provides the legal and technology requirements for standardised model on the automatic exchange of financial account information, including information on assets and accounts held by banks, insurers and other investment entities (such as funds and certain trusts) held by individuals and entities resident offshore.
Key-findings within the Report
94 jurisdictions have in 2019 completed around 6100 bilateral exchanges containing 47 million financial accounts with total assets having a value of approximately U.S. $4.9 trillion;
The implementation of the domestic legal frameworks has already been assessed and resulted in 525 recommendations being made for jurisdictions to improve their domestic legal frameworks;
In 2020 the Global Forum is shifting its focus assessing the effectiveness of participating jurisdictions implementation of the AEoI standards and will issuing effectiveness ratings in 2021;
In 2020 the Global Forum will examine the also administrative compliance framework of each jurisdiction in place to ensure that financial institutions comply with their AEoI due diligence and reporting obligations;
The Authors observations on Hong Kong for 2020
The OECD in June 2019 release a revised reporting schema for the OECD Common Reporting Standard. The schema will come into force on 01 January 2021 and should therefore consider sufficient time and resources to specify, build and test the technical processes.
It should be pointed out again, that from the reporting year 2020 onwards (first reporting in 2021) the number of reportable jurisdictions will be increased from 75 to 126.
In order to support the automatic exchange of information collected under the OECD's Model Mandatory Disclosure Rules (MDR) on “Common Reporting Standard (CRS) Avoidance Arrangements and Opaque Offshore Structures” – issued on 09 March 2018 -, the OECD released also in June the international administrative and operational framework for the exchange of information collected under the MDRs.
To enable jurisdictions to exchange MDR relevant data under the operational the OECD plan to release a MDR XML Schema and User Guide, which will facilitate the structured collection and exchange of information such information.
Due to the already known changes on the existing CRS reporting scheme, the increased number of reportable jurisdiction and the planned activities on the OECD side, Hong Kong’s Financial Institutions should revisit their current CRS due diligence and reporting processes to identify whether the processes supports their local compliance requirements beyond 2020.
 The 2019 AEoI Implementation Report