Over the last few years, there has been growing interest in the tax info exchange (information on tax matters). During political conferences on both an international and a European level, there have been signs that the exchange of information to prevent tax fraud, avoidance and evasion is high on the political agenda. While writing this article, a huge leak of documents occurred at law firm Mossack Fonseca in Panama. The documents contain information about their clients, who are being accused of using offshore companies to hide their wealth. The so-called ‘Panama Papers’ have been a trending topic ever since.
This article gives a short inventory of the recent developments at the international, European and Dutch levels. In addition, the tax agreement between Panama and the Netherlands will be examined, specifically with regard to the possibilities of the exchange information between these countries. Finally, the (lack of) protection of taxpayer’s rights in the Netherlands will be discussed.
Read a preview of the article here:
In the United States, the Foreign Account Tax Compliance Act (FATCA) came into effect on 1 January 2013. According to this law, all financial institutions (worldwide) should provide information on US taxpayers, beginning in 2014, to US tax authorities. The US clearly wants to fight tax fraud. The Netherlands have joined with a number of other European Union Member States in a pilot project to battle tax evasion and promote fiscal transparency, signing the FATCA agreement with the US on 18 December 2013. The European Commission has already indicated that the FATCA model should also be applied within the EU.
According to the `Common Reporting Standard’, Dutch financial institutions had to begin identifying their customers from 1 January 2016 in addition to verifying where their customers reside.
Read more about: tax info exchange & protection of tax payer’s rights