In this regard, legal systems may be based on a bilateral agreement between the competent authority for the implementation of the automatic exchange of information in accordance with the common standard of notification or automatic exchange of reports by country on a TIEA, particularly in cases where it is not (yet) possible to automatically exchange information through the relevant authority within the framework of a relevant multilateral agreement. Dutch Finance Minister Wouter Bos sees the model agreement as an important step. “The Netherlands has always believed that transparency and information exchange are key elements in neutralising harmful tax practices, and should therefore be at the top of the international tax agenda. In this context, I am very pleased with the publication of the model agreement. The fact that eleven non-member financial centres had the courage to actively contribute to this achievement is very encouraging. I would like to thank everyone, especially Malta, which, as co-chair, has made a decisive contribution to success. I expect this agreement to become the international standard for the exchange of tax information. OECD Secretary-General Donald J. Johnston welcomed the publication of the model and, in particular, the constructive participation of non-member financial centres in this ambition: “I have always said that it is important for the OECD to use new avenues to carry out its work and to seek contributions beyond its own membership. It is for these reasons that the OECD set up a series of global forums in 2000 that would provide a framework for our discussions with non-OECD economies in some key areas. Most TIEAs are based on the OECD`s model of agreement on the exchange of information on tax issues (convention model) published in 2002. Maltese Minister John Dalli added: “It is essential that the agreement becomes the international standard.
In its introduction, the exchange agreement recognizes that it is “important that financial centres around the world comply with the standards for the exchange of tax information set out in this document.” It encourages as many savings as possible to participate in this important undertaking and notes that it is not in the interests of the participating economies that “the implementation of the standards contained in this agreement should lead to a migration of businesses to economies that do not participate in the exchange of information.” OECD members and promised jurisdictions will conduct an ongoing dialogue to work towards this goal. A TIEA is a bilateral agreement through which legal systems agree to cooperate in tax matters through the exchange of information. Under the convention model, the exchange of information is only on request (as opposed to the automatic or spontaneous exchange of information) and each TIEA sets out guidelines and criteria by which the applicant must submit its request for information. The applicant can only request information that is predictable for the management and application of its legislation. It is not authorized to conduct fishing expeditions or to request information that is probably not relevant to a particular taxpayer`s tax issues. This model was born out of the OECD`s work to combat harmful tax practices that distort competition in the global mobile financial services market. One of the most important criteria for identifying harmful tax practices is the lack of effective exchange of information. The model can be used as a basis for the conclusion of information exchange agreements. The agreement contains two models of bilateral agreements developed taking into account commitments made by the OECD and promised legal systems.