IEIM112300 - Exchange of Information: Outward requests: Exhaust domestic avenues

You should not ask another tax authority to obtain information for you without looking to see if you can obtain the information in the UK first, and if possible attempting to do so.

As a rule of thumb, if you have contacted your customer and used information powers to the extent that you are content the information cannot be obtained, you have exhausted domestic avenues. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

In many cases the UK entity will provide the information on request even if they have to seek the information themselves from an overseas party such as another company in the group. If you consider that the information is held in the UK or the UK entity has the power to obtain the information then please make sure you have explored the use of domestic information powers.

Where the information is not in the power or possession of the UK entity you do not need to use domestic information powers.

There is an exception to this general rule. If seeking the information domestically would seriously prejudice the conduct of your enquiry you can make an exchange of information request without approaching UK sources first.

Example

A tax enquiry is under way in the UK into the tax affairs of a company which appears to have restructured its financing so that it is now paying interest to a jurisdiction with no corporation tax. The tax specialist is investigating the reasons for the restructuring. Key decisions are said to have been made in Jurisdiction B where the group headquarters are based.

The UK company provides narrative explanations and some evidence of decisions made in the UK. However the company maintains that it has no power to obtain the information held by the parent company in Jurisdiction B. Where we are satisfied that the information cannot be obtained using the information powers in Schedule 36 to Finance Act 2008 an outward request should be made to Jurisdiction B.