China Signs OECD Convention On Tax Information Exchange

www.bethelfinance.com

China became the 56th signatory of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters during a ceremony at the headquarters of the Organization for Economic Cooperation and Development (OECD) in Paris on August 27.

With the signing between the Chinese Tax Commissioner Jun Wang and Angel Gurría, Secretary-General of the OECD, all G20 countries have now fulfilled the commitment they made at their Summit in Cannes in November 2011, to sign the Convention and move towards the automatic exchange of tax information as the global standard.

It was emphasized that all tax authorities worldwide are moving from bilateral to multilateral cooperation and from exchange of information on request to automatic exchange of information. The Convention provides a comprehensive multilateral framework for such co-operation and complements other initiatives, such as the standardized multilateral automatic exchange model now being developed by the OECD and its G20 partners. It provides for the spontaneous exchange of information, simultaneous tax examinations and assistance in tax collection.

"This Convention provides the ideal instrument to swiftly implement automatic exchange, and to do so with a wide range of partners," said Gurría. "A valuable tool for governments to fight offshore tax evasion, the Convention also ensures compliance with national tax laws and respects the rights of taxpayers by protecting the confidentiality of the information exchanged."

He noted that the signing of the Convention also "represents another significant step in the strengthening of collaboration between China and the OECD." The OECD and China cooperate closely on a number of other taxation issues, as China plays a leading role as a Vice-Chair of its Steering Group and as a member of the Peer Review Group, and participates in the OECD's Forum on Tax Administration and its Committee on Fiscal Affairs, where the OECD looks forward to working with China to deliver on the Action Plan to put an end to tax base erosion by multinational enterprises.

In addition, Gurría congratulated China on "the very positive results of China's peer review, which demonstrated the adequacy of China's legal and regulatory framework and the effectiveness of its tax administration in implementing the Global Forum's standards."