Worldwide: The OECD International Tax Standard And The Current State Of Play

Last Updated: 7 October 2009
Article by John Ridgway

The focus of the Major Players has in recent times centred on transparency and the willingness to exchange taxation information. These principles have become the benchmark for assessing a particular jurisdiction and whether or not its activities fall within the tax haven sphere.


Primarily, transparency seeks to tackle the issue of secrecy. In this context, the procedures a jurisdiction has in place to ensure that it adequately obtains and retains information concerning offshore clients and their activities becomes significant, as does their willingness to exchange such information. Secrecy may occur in tax havens on several levels.

In most common law jurisdictions, for example, secrecy manifests itself in the context of a bank's duty to observe confidentiality in relation to customer information, albeit that there are well established exceptions to this duty, for example that disclosure is permitted under compulsion of law. (1) However, it has been held that the compulsion of law exception to the duty of confidentiality relates to compulsion of law in the jurisdiction where the contractual relationship was created and not the compulsion of law of a foreign jurisdiction, (2) making it difficult for a foreign authority to gain access to such information.

In some jurisdictions, secrecy provisions may be entrenched in legislation, prohibiting disclosure of information in relation to the ownership of offshore entities, the transactions they engage in and the general affairs of the entity. There may or may not be exceptions to such provisions.

For the above reasons, taxation authorities may not be able to obtain access to information in relation to its own taxpayers, outside the scope of its jurisdiction.

The OECD International Tax Standard

The OECD's Global Forum on Transparency and Exchange of Information has developed standards of transparency and exchange of information. They serve as a model for the vast majority of the 3600 bilateral tax conventions entered into by OECD and non OECD countries and may now be considered the international norm for tax cooperation.

These require:

1. exchange of information on request where it is "foreseeably relevant" to the administration and enforcement of the domestic laws of the treaty partner;
2. no restrictions on exchange caused by bank secrecy or domestic tax interest requirements;
3. availability of reliable information and powers to obtain it;
4. respect for taxpayers rights; and
5. strict confidentiality of information exchanged (together referred to as the OECD International Tax Standard). (3)

"Exchange of information" envisages the creation of taxation information exchange agreements (TIEA) between countries, under which countries agree to exchange information for tax purposes. Agreements may be bilateral or multilateral.

The OECD have suggested that there is no "hard and fast" line as to whether the OECD Tax Information Standard has been implemented, however, a good indicator of progress is whether a jurisdiction has signed at least 12 TIEAs that meet the OECD Tax Information Standard. This initial threshold will be reviewed to take account of:

1. the jurisdictions with which the agreements have been signed (a tax haven which has 12 agreements with other tax havens would not pass the threshold);
2. be willing to continue to enter into TIEAs; and
3. effectively implement and administer the relevant TIEAs. (4)

The OECD indicates that more than 40 TIEAs have been signed or announced since last November and that since 2000, over 100 TIEAs have been signed. (5) It is likely that many more will be signed in the near future as countries seek inclusion on the OECD white list.

The Current State of Play

Although there has been a steady clamp down on tax haven activity for decades, it seems that the sustained efforts of the Major Players in recent times are yielding significant results. Current events across the globe highlight that the coordinated and sustained attack of the Major Players is putting increased pressure on both their own evasive taxpayers and on the tax haven jurisdictions that are regarded as facilitating them. The seemingly endless game of cat and mouse seems to be shifting largely to the "cats" advantage.

The Major Players have recently increased their hunt for tax evaders in jurisdictions that have to date been protected from the "name and shame" tag of tax havens. Smaller and less politically powerful jurisdictions, including most Pacific Island jurisdictions, have long been viewed with contempt for their offshore financial services (6), other larger principalities such as Liechtenstein and Switzerland, however, have previously escaped condemnation.

This has changed in recent times. In 2008, Germany paid an informant for records apparently purloined from a Liechtenstein bank, in an effort to apprehend German tax cheats. In 2009, the United States demanded that the juggernaut Swiss bank UBS surrender the names of 52,000 account holders suspected of tax evasion, a case that threatens the foundations of Swiss banking secrecy (See "The United States of America v. UBS AG").

The Obama Administration is working for the enactment of new legislation, the Stop Tax Haven Abuse Act – that is designed to better enable US authorities to obtain information about offshore trusts and accounts used by Americans.

In Australia, the Australian Tax Office through Project Wickenby, is persistently pursuing Australian tax evaders who deploy tax haven-based vehicles.

All over the world in the next few years many new laws will be enacted seeking to curtail the use of tax havens and many cases prosecuted against persons regarded as tax evaders.

As transparency and TIEAs become the new focal point for eliminating tax evasion and security threats , it is almost inevitable that certain jurisdictions will not be able to keep up with the demands of implementing internationally adequate regimes as required by the Major Players.

One can safely say that efforts to curtail certain aspects of the use of tax havens will continue to be a permanent feature of the international political landscape. Clearly, that does not mean the world is or will be free from tax havens. Rather, it will merely mean that there has been substantial progress made in at least some areas, which in the current state of play, will mean transparency and the exchange of information.


(1) Tournier v National Provincial and Union Bank of England [1924] 1 KB 461
(2) F.D.C Co Ltd and Others v The Chase Manhattan Bank, N.A. (1990) H.K.L.R. 277
(3) "Overview of the OECD's Work on Countering International Tax Evasion", OECD, 19 August 2009, page 2
(4) Ibid. page 10 (5) Ibid. page 2
(6) Nauru is a good example. It received widespread international criticism for its offshore financial activities throughout the 1990s culminating in being blacklisted by both the OECD and the FATF.
(7) The G20 Summit in London in April 2009 emphasised the OECD's position of wanting to eradicate unco-operative financial centres. Flying into London, a belligerent President Sarkozy stated: "We [the G20] have said very clearly that we want lists of financial centres that do not co-operate with OECD criteria, and to draw the consequences of that'." P. Aldrick, "G20 summit: Sun setting on tax havens." The Telegraph, 2 April, 2009.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.