OECD has today taken a very important step towards global tax transparency giving countries tools for automatically exchanging information worldwide.
OECD has thus published a Model Agreement on automatic exchange of information of financial information.
The Model Agreement 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 the obligations passed on to the financial institutions.
More than 40 countries have committed to early adoption of the Agreement.
The financial information covered includes all types of investment income (including interest, dividends, income from certain insurance contracts and other similar types of income) but also account balances and sales proceeds from financial assets.
The accounts covered include accounts held by individuals and entities (which includes trusts and foundations), and a requirement to look through passive entities to report on the individuals that ultimately control these entities.
The financial institutions that are required to report under include banks and custodians, brokers, certain collective investment vehicles and certain insurance companies.
The Model Agreement can be found here.