Commonwealth Secretariat Reports on Need for Fairness in Tax Information Exchange

On May 4, 2007, the Commonwealth Secretariat issued a report calling for fairness in the use of tax information exchange, non-discrimination in the treatment of small and developing countries, and access to double tax treaties for small and developing countries. The report discusses the evolution of the Organization for Economic Cooperation and Development (OECD)’s harmful tax competition initiative (also referred to as the harmful tax practices initiative). It focuses on the initial elaboration of the regime, in which the 47 small and developing countries were not consulted in the development of the OECD’s criteria for unacceptable forms of tax competition, the OECD’s unique criteria for “tax havens,” or the determination of countries deemed to fit the criteria. As a result, the 41 “targeted” countries objected to both the procedural and substantive aspects of the OECD exercise. They asserted the right to a “level playing field”, not only in terms of what was expected from them with regard to tax information exchange and standards for transparency relative to what was expected of OECD members or other competitor countries, but also in terms of a fair basis for financial services sector competition – one that was not biased in favor of OECD members ... [more]