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New standard for exchange of cross-border information

Improving transparency has been a key theme of the OECD's Base Erosion and Profit Shifting (BEPS) Action Plan. A new international standard has been agreed which requires the exchange of information between tax treaty partners concerning certain rulings.

The standard applies to these types of rulings:

  • rulings related to preferential regimes
  • cross-border unilateral advance pricing agreements and any other cross-border unilateral tax ruling covering transfer pricing or the application of transfer pricing principles
  • cross-border rulings giving a unilateral downward adjustment to the taxpayer's taxable profits in the country giving the ruling
  • permanent establishment rulings, and
  • related party conduit rulings.

The obligation to exchange information on these rulings applies not only to future rulings, but also to past rulings that relate to earlier years. It has been agreed that information on rulings that have been issued on or after 1 January 2010 and were still in effect as from 1 January 2014 must be exchanged.

Inland Revenue will be implementing this new standard during 2016.