Exchange of Information: Key concepts: Competent Authorities
In order for two jurisdictions to exchange customer information they must do so through their Competent Authorities. This can either be through the Competent Authorities corresponding directly, or by them facilitating a meeting or call involving other officers. This is to protect customer information and ensure that it is only exchanged in accordance with an appropriate legal gateway when legally permissible.
Competent Authorities are trained specialists who are familiar with the information gateways and exchange procedures, and in many cases will have established relationships with other jurisdictions that will help to get the most out of the exchange.
A disclosure of customer information to another tax authority by an officer who is not a Competent Authority is unlawful, and that officer could face significant sanctions. It is therefore important that you use the correct procedures.
The legal framework
Information can only be exchanged with another jurisdiction if there is a legal gateway for the exchange (IEIM101200). All legal gateways provide for exchanges of information by Competent Authorities. Who will fill the role of Competent Authority is specified in the exchange instrument.
The Competent Authority for the UK under a tax exchange agreement will be the HMRC Commissioners. In practice, the Commissioners cannot be expected to perform all these exchanges, so in line with section 13 of the Commissioner for Revenue and Customs Act 2005 they will delegate authority to specially trained officers of HMRC.
Who can be a Competent Authority?
There are designated teams within HMRC who deal with information exchange as Competent Authorities. Other teams and individuals will also be Competent Authorities where they need to discuss customers with other jurisdictions for specific functions (such as transfer pricing or collection of cross-border debts).
In some circumstances it may be appropriate for other officers to have Competent Authority status for a limited time for a specific case or an international visit. This will normally be because of their particular specialism or knowledge of the customer. In no circumstances would any officer be given Competent Authority status without receiving the relevant training.
(This content has been withheld because of exemptions in the Freedom of Information Act 2000)