IEIM102300 - Exchange of information: Types of exchange: Automatic

Automatic exchange is where the Competent Authorities of two or more jurisdictions make agreement to systematically exchange large quantities of data on a given subject. Some existing examples include: property data regarding one another’s tax residents, financial accounts data, and employment income.

Such exchanges are normally facilitated using a Competent Authority Agreement (IEIM230200), which will explain how the jurisdictions will make the exchange and what will be exchanged. On a bilateral basis these may be a simple agreement as to the nature of the information; in some circumstances, particularly multilaterally, they will be very detailed.

There is detailed guidance in IEIM400000+ on exchange of financial accounts data.

Automatic exchange is possible under most Double Tax Treaties (IEIM210100), as these generally do not specify, and thereby limit, the types of exchange possible. On some rare occasions, however, there may be a protocol prohibiting automatic exchange, or in some older DTAs the exchange Article may refer exclusively to exchange on request. These situations are rare.

Tax Information Exchange Agreements (IEIM210200) have separate Articles for each type of exchange, and again some older TIEAs may not allow for automatic exchange.

The OECD Multilateral Convention on Tax (IEIM210300) allows for automatic exchange.