Global Forum releases compliance ratings on tax transparency for 10 jurisdictions: An Article Authored by Paul Oliveira, CPA from KLR - Accounting Firm Boston, Massachusetts, Providence, Rhode Island

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Global Forum releases compliance ratings on tax transparency for 10 jurisdictions

posted Oct 13, 2014 by Paul Oliveira, CPA

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The Global Forum on Transparency and Exchange of Information for Tax Purposes recently published 13 new peer review reports demonstrating progress toward implementing an international standard for exchange of information on request.

The forum also issued compliance ratings for 10 jurisdictions.

A Phase 1 report for Georgia assessed the country’s legal and regulatory framework for meeting the standard. Georgia now qualifies for the next stage of the review process, which will assess the country’s exchange of information practices.

The forum reviewed practices through Phase 2 peer review reports in ten jurisdictions and allocated ratings for compliance with the individual elements of the international standard, as well as an overall rating.

Mexico received an overall rating of Compliant.

The following four jurisdictions received an overall rating of Largely Compliant:

  1. Chile,
  2. The Former Yugoslav Republic of Macedonia,
  3. Montserrat, and
  4. St. Kitts and Nevis. 

Five other jurisdictions received a Partially Compliant rating:

  1. Andorra,
  2. Anguilla,
  3. Antigua and Barbuda,
  4. Indonesia, and
  5. Saint Lucia.

With this batch of reports, the Global Forum has completed 143 peer reviews and assigned Compliant ratings to 64 jurisdictions that have gone through Phase 2 reviews. Four jurisdictions are rated as Non-Compliant, while eight are rated Partially Compliant.

Looking forward

Additional peer reviews will be completed by the next plenary meeting of the Global Forum, in Berlin, on October 28 and 29, 2014.
That meeting is expected to add to the growing momentum toward a higher level of tax transparency worldwide. The Global Forum is the multilateral framework within which economies inside and outside the Organisation of Economic Cooperation and Development (OECD) conduct their work in the area of transparency and information exchange.

Sidebar: U.S. Treasury reissues list of boycott countries

The U.S. Treasury recently reissued its list of the nine countries that require cooperation with, or participation in, an international boycott as a condition of doing business.

The countries are:

  • Iraq
  • Kuwait
  • Lebanon
  • Libya
  • Qatar
  • the Republic of Yemen
  • Saudi Arabia 
  • Syria 
  • the United Arab Emirates

The listed countries are identified under Section 999 of the U.S. Internal Revenue Code (IRC), which requires U.S. taxpayers to file reports with the Treasury concerning their operations in these “boycotting” countries. U.S. law generally prohibits participating or agreeing to participate in foreign boycotts that the U.S. doesn’t sanction.

Such taxpayers incur adverse consequences, including denial of U.S. foreign tax credits for taxes paid to those countries.

Be cautious in your future business transactions, as the Treasury periodically publishes the boycott list. The antiboycott laws and regulations are complex, so, as your company continues with international business, it should carefully screen transactions for antiboycott issues and determine whether Treasury or Commerce Department regulations and requirements apply.
© 2014