Automatic Exchange of Information on Financial Accounts

Published
Last updated 21 November 2016

On 29 October 2014, 51 jurisdictions (countries and dependent territories) signed a multilateral agreement to automatically exchange information on financial accounts based on the multilateral convention. As of 02 November 2016, 36 jurisdictions more joined the multilateral agreement, making 87 jurisdictions in total. This is the first ever agreement to exchange this type of information automatically. All previously signed agreements concerning exchange of information on tax matters assume that the information is exchanged on request, namely relating to a specific tax investigation, either criminal or civil. Signing the agreement on automatic information exchange is a huge step to address the issues of international tax avoidance and evasion.

The information will be exchanged between the jurisdictions that signed the agreement under a single global standard on an annual basis.

54 jurisdictions committed to start the information exchange by 2017, 47 jurisdictions more - by 2018.

Jurisdictions That Will Exchange Information

The financial accounts information will be exchanged only between the countries and the territories for which the convention is in force and in effect.

To clarify the information flows, consider the examples:

  1. Both Jurisdiction A and Jurisdiction B signed the convention.
    These jurisdictions will exchange the information. The Jurisdiction A will report to the Jurisdiction B, the Jurisdiction B will report to the Jurisdiction A.
  2. Jurisdiction C signed the convention, Jurisdiction D didn't sign the convention.
    There will be no information exchange between the Jurisdiction C and Jurisdiction D. The Jurisdiction C will not report to the Jurisdiction D, and the Jurisdiction C will not report to the Jurisdiction D.

By the end of 2018 101 jurisdictions will exchange the information on financial accounts.

European Countries and Territories That Will Exchange Information

Several notes should be made about status of commitments of the European countries and territories:

Reporting Financial Institutions

The financial institutions that required to report are not only banks and custodians but also other financial institutions such as

Branches of Foreign Financial Institutions

Branches of foreign financial institutions operating in a jurisdiction that joined the convention, will report in this jurisdiction.

For example:

  A branch of Deutsche Bank operating in Luxembourg will report to competent authorities of Luxembourg rather than of Germany.

Branches of foreign financial institutions operating in a jurisdiction that didn't join the convention, will not report either in this jurisdiction or in their home jurisdiction.

For example:

  A branch of BNP Paribas operating in Bulgaria will not report either to Bulgarian or to French competent authorities because Bulgaria didn't sign the convention.

Reportable Accounts

Reportable accounts include accounts held by individuals and entities (which includes trusts and foundations).

Individual Accounts

Reportable Persons

An account held by an individual (individuals) is a reportable account if the account holder(s) is a tax resident (a resident for tax purposes) of a reportable jurisdiction. The account holder is called a reportable person.

Preexisting financial accounts held by individuals (accounts that existed before the jurisdiction signed the convention) will be reported as well as new financial accounts.

For example:

  1. If a citizen of the United Kingdom is a tax resident of Spain and has an account in Liechtenstein, his/her account will be reported to Spanish authorities by the authorities of Liechtenstein.
  2. If a citizen of the United Kingdom is a tax resident of Spain and has an account in the United Kingdom, his/her account will be reported to Spanish authorities by the authorities of the United Kingdom.
  3. If a citizen of the United Kingdom is a tax resident of Spain and has an account in Serbia, his/her account will not be reported to Spanish authorities because Serbia didn't sign the convention.
  4. If a citizen of the United Kingdom is a tax resident of Serbia and has an account in Liechtenstein, his/her account will be reported to Serbian authorities by the authorities of Liechtenstein because Serbia didn't sign the convention.

Entity Accounts

An entity account is a reportable account if:

A passive NFE is a non-financial entity if more than 50% of its gross income for the precessing calendar year is a passive income or if more than 50% of its assets produce or are held for production of passive income.

Preexisting financial accounts held by reportable entities will not be reported if the aggregate account balance or value doesn't exceed USD 250,000 as of December 31 of a reportable year. However, the account will become reportable if the account balance exceed USD 250,000 as of December 31 of any subsequent calendar year.

New financial accounts held by reportable entities will be reported undependently of the account balance.

For example:

If a citizen of the United Kingdom is a tax resident of Spain and owns a company (a passive NFE) in Bermuda with a corporate account in Luxembourg, the information about this account will be reported to Spanish authorities by the authorities of Luxembourg.

Information To Be Reported

For each of reportable accounts the following information will be reported:

  1. Account holders details: for each of the reportable account holders, the following details will be reported:
    • name;
    • address;
    • jurisdiction(s) of residence;
    • taxpayer identification number (TIN);
    • if a reportable account holder is an individual, date and place of birth;
    • if a reportable account holder is an entity, for each of the controlling person the account holder details listed above are reported.
  2. Account details: account number or its equivalent in the case of absence an account number.
  3. Financial institution details: name and identifying number (if available).
  4. Financial information:
    • account balance;
    • sales proceeds from financial assets;
    • all types of investment income (including interest, dividends, income from certain insurance contracts and other similar types of income);
    • currency in which each amount is denominated.

Start of Information Exchange

According to the Common Reporting Standard the information is to be exchanged starting from the years specified in a jurisdiction's commitment within 9 months after the end of the calendar year to which the information relates.

This means that

If one jurisdiction committed to start the exchange in September 2017 and another in September 2018, the exchange between this pair of jurisdictions will start in September 2018 and only the accounts exisitng in 2017 and the following years will be reported.

The information will only by exchanged with respect to a calendar year between a pair of jurisdiction if both of the conditions below are fulfilled:

Status of Commitments on Automatic Information Exchange

The table below shows the list of jurisdictions and their commitments to start the information exchange.

Country Sign Date Exchange Start Date
 Albania 29 October 2014 September 2018
 Andorra not signed September 2018
 Anguilla 29 October 2014 September 2017
 Antigua and Barbuda 29 October 2015 September 2018
 Argentina 29 October 2014 September 2017
 Aruba 29 October 2014 September 2018
 Australia 29 October 2015 September 2018
 Austria 29 October 2014 September 2018
 Bahrain not signed September 2018
 Barbados 29 October 2015 September 2017
 Belgium 29 October 2014 September 2017
 Belize 29 October 2015 September 2018
 Bermuda 29 October 2014 September 2017
 Brazil not signed September 2018
 British Virgin Islands 29 October 2014 September 2017
 Brunei Darussalam not signed September 2018
 Bulgaria 29 October 2015 September 2017
 Canada 29 October 2015 September 2018
 Cayman Islands 29 October 2014 September 2017
 Chile 29 October 2015 September 2018
 China not signed September 2018
 Colombia 29 October 2014 September 2017
 Cook Islands 29 October 2015 September 2018
 Costa Rica 29 October 2015 September 2018
 Croatia 29 October 2014 September 2017
 Curacao not signed September 2017
 Cyprus 29 October 2014 September 2017
 Czech Republic 29 October 2014 September 2017
 Denmark 29 October 2014 September 2017
 Dominica not signed September 2018
 Estonia 29 October 2014 September 2017
 Faroe Islands 29 October 2014 September 2017
 Finland 29 October 2014 September 2017
 France 29 October 2014 September 2017
 Germany 29 October 2014 September 2017
 Ghana 29 October 2015 September 2018
 Gibraltar 29 October 2014 September 2017
 Greece 29 October 2014 September 2017
 Greenland not signed September 2017
 Grenada 29 October 2015 September 2018
 Guernsey 29 October 2014 September 2017
 Hong Kong not signed September 2018
 Hungary 29 October 2014 September 2017
 Iceland 29 October 2014 September 2017
 India 29 October 2015 September 2017
 Indonesia 29 October 2015 September 2018
 Ireland 29 October 2014 September 2017
 Isle of Man 29 October 2014 September 2017
 Israel not signed September 2018
 Italy 29 October 2014 September 2017
 Japan 29 October 2015 September 2018
 Jersey 29 October 2014 September 2017
 Korea, Republic of not signed September 2017
 Kuwait not signed September 2018
 Latvia 29 October 2014 September 2017
 Lebanon not signed September 2018
 Liechtenstein 29 October 2014 September 2017
 Lithuania 29 October 2014 September 2017
 Luxembourg 29 October 2014 September 2017
 Macau not signed September 2018
 Malaysia not signed September 2018
 Malta 29 October 2014 September 2017
 Marshall Islands 29 October 2015 September 2018
 Mauritius 29 October 2014 September 2018
 Mexico 29 October 2014 September 2017
 Monaco not signed September 2018
 Montserrat 29 October 2014 September 2017
 Nauru not signed September 2018
 Netherlands 29 October 2014 September 2017
 New Zealand 29 October 2015 September 2018
 Niue 29 October 2015 September 2017
 Norway 29 October 2014 September 2017
 Panama not signed September 2018
 Poland 29 October 2014 September 2017
 Portugal 29 October 2014 September 2017
 Qatar not signed September 2018
 Romania 29 October 2014 September 2017
 Russian Federation not signed September 2018
 Saint Kitts and Nevis not signed September 2018
 Saint Lucia 29 October 2015 September 2018
 Saint Vincent and The Grenadines 29 October 2015 September 2018
 Samoa 29 October 2015 September 2018
 San Marino 29 October 2014 September 2017
 Saudi Arabia not signed September 2018
 Seychelles 29 October 2015 September 2017
 Singapore not signed September 2018
 Sint Maarten (Dutch part) not signed September 2018
 Slovakia not signed September 2017
 Slovenia 29 October 2014 September 2017
 South Africa 29 October 2014 September 2017
 Spain 29 October 2014 September 2017
 Sweden 29 October 2014 September 2017
 Switzerland 29 October 2015 September 2018
 Bahamas not signed September 2018
 Trinidad and Tobago not signed September 2017
 Turkey not signed September 2018
 Turks and Caicos Islands 29 October 2014 September 2017
 United Arab Emirates not signed September 2018
 United Kingdom 29 October 2014 September 2017
 Uruguay not signed September 2018
 Vanuatu not signed September 2018

See Also

Countries Which Will Not Automatically Exchange Account Information

FATCA and European countries

External Links

  1. Major new steps to boost international cooperation against tax evasion, OECD
  2. Standard for Automatic Exchange of Financial Account Information, OECD