A Tax Information Exchange Agreement (TIEA) is a bilateral agreement between two countries that provides for the exchange of information for tax purposes.
The purpose of a TIEA is to facilitate the exchange of information between the tax authorities of two countries in order to prevent tax evasion and ensure compliance with tax laws. The agreement typically includes provisions for the exchange of information on bank accounts, financial transactions, and other tax-related matters.
TIEAs are an important tool in the fight against tax evasion, particularly in cases where a taxpayer has assets or income in one country and is resident in another. The agreements help to ensure that tax authorities have access to relevant information that may be necessary to assess a taxpayer’s liability for tax.
TIEAs are typically negotiated on a case-by-case basis and can include provisions for the exchange of information on both civil and criminal tax matters. In many cases, TIEAs are based on the OECD’s Model Tax Convention, which provides a framework for the exchange of information between countries.
As of 2021, many countries have signed TIEAs with other countries, and the agreements have become an important tool in promoting tax transparency and cooperation between countries.
Tax Information Exchange Agreements (TIEAs) are usually initiated through bilateral negotiations between two countries. Either country can initiate the negotiation process, depending on their particular interests and needs.
In some cases, TIEAs may be initiated as a result of international initiatives or agreements, such as the work of the Organization for Economic Co-operation and Development (OECD) on tax transparency and information exchange. The OECD has developed a Model Tax Convention that provides a framework for the exchange of tax information between countries, which can be used as a basis for negotiating TIEAs.
In addition, the Global Forum on Transparency and Exchange of Information for Tax Purposes, which is also an OECD initiative, has been instrumental in promoting tax transparency and cooperation between countries. The Global Forum conducts peer reviews of countries’ legal and regulatory frameworks for the exchange of tax information and provides recommendations for improvement.
Overall, the negotiation and implementation of TIEAs are important steps in the promotion of tax transparency and the prevention of tax evasion, and are usually initiated through a combination of bilateral and international efforts.
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