EU and OECD Proposals for International Tax Cooperation: A New Road?

Mosquera Valderrama, I.J. (2010)

Article / Letter to editor

The recent economic crisis increased the need for countries and international organizations to find better solutions to tackle tax evasion due to the illicit flow of capitals resulting from the use of tax havens and offshore financial centres and to prevent bank secrecy. As a consequence, governments and international organizations have put higher in the political agenda the importance to achieve more transparency and exchange of information by means of increasing international tax cooperation. At international level, organizations such as the Organization for Economic Cooperation and Development ('OECD'), the United Nations ('UN') and the European Union ('EU') are mobilizing and presenting their own solutions in order to enhance international tax cooperation. For instance whilst the OECD decided to start a peer-review of the application of the OECD standards for transparency and exchange of information in at least 100 jurisdictions including OECD and non-OECD countries; the EU Commission decided to present a EU Communication that deals with the introduction of good governance in tax matters. This EU Communication was adopted by Resolution of the Parliament. For the EU, in order to protect the financial system from non-cooperative jurisdictions and tax havens; actions to achieve international good governance in the tax area -that includes transparency, exchange of information and fair tax competition- need to be implemented. The EU Communication and the EU Resolution result in transparency and exchange of information not only for EU countries and EU potential candidates but also for third countries that require EU development aid or countries that conclude agreements with the EU or with EU countries. The UN whilst following to a certain extent the OECD approach; it has also decided to introduce a new Code of Conduct on Cooperation in Combating International Tax Evasion that will be applicable to developing countries.

The aims of this article are to review the current work on international tax cooperation carried out by the OECD, the EU and the UN (para. 1) and subsequently to present and compare the EU Communication and the EU Resolution and to analyze the reasoning behind the adoption by the Commission and Parliament of the principles to promote good governance in tax matters (para. 2). This article also aims to present some thoughts recommendations for further research on international tax cooperation (para. 3). The main focus of this article is the EU work to promote good governance in tax matters, and therefore, the EU Communication and the EU Resolution will be presented in more detail. In order to provide a comparison of the current work on international tax cooperation, the OECD and the UN proposals on transparency and exchange of information will be also addressed in this article. Given that the UN follows to some extent the OECD’s approach, only some of the important issues in which the UN work on international cooperation deviates from the OECD will be presented.

• exchange of information
• OECD
• UN
• double tax conventions,
• European Union

• All authors: Mosquera Valderrama, I.J.
• Date: 2010-08-23
• Journal: Tax Notes International
• Volume: 59
• Issue: 8
• Pages: 609 - 622