China joined the group of more than 50 developed and developing countries, including all Group of Twenty members, which are signatories to the Convention on Mutual Administrative Assistance in Tax Matters. Through the convention, China will participate in global efforts to combat tax avoidance and evasion by cooperating with other states in the assessment and collection of taxes.
China signed the agreement to share tax records in a ceremony at the OECD on Tuesday, Aug. 27.
All G-20 countries have now fulfilled the commitment they made at the Cannes G-20 Summit to sign the convention and move toward automatic exchange of information as the new, global standard.
Tax authorities worldwide are moving from bilateral to multilateral cooperation and from exchange of information on request to automatic exchange of information. The convention provides a comprehensive multilateral framework for such cooperation and complements other initiatives, such as the standardized multilateral automatic exchange model being developed by the OECD and its G-20 partners.
The Cayman Islands committed to joining the convention in June of this year, following pressure by the U.K. government prior to a G-8 meeting to do so. In contrast to the 31 bilateral OECD tax information exchange agreements signed by the Cayman Islands, the convention can form the basis for any multilateral form of administrative cooperation between states in the assessment and collection of taxes.
“Today’s signing is both timely and important,” said OECD Secretary General Angel Gurría, “as the G-20 has endorsed automatic exchange of information as the new global standard. This convention provides the ideal instrument to swiftly implement automatic exchange, and to do so with a wide range of partners. This also represents another significant step in the strengthening of collaboration between China and the OECD.”
The convention also provides for spontaneous exchange of information, simultaneous tax examinations and assistance in tax collection. The OECD considers the convention a valuable tool for governments to fight offshore tax evasion. The convention further aims to ensure compliance with national tax laws and respect the rights of taxpayers by protecting the confidentiality of the information exchanged.
The 56 signatories to the convention are: Albania, Argentina, Australia, Austria, Azerbaijan, Belgium, Belize, Brazil, Canada, Colombia, Costa Rica, China, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Ghana, Greece, Guatemala, Iceland, India, Indonesia, Ireland, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Malta, Mexico, Moldova, Morocco, Netherlands, New Zealand, Nigeria, Norway, Poland, Portugal, Romania, Russian Federation, Saudi Arabia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, Ukraine, United Kingdom and United States.