The UK is ‘largely compliant’ with the requirements of the international standard on transparency and exchange of information on request (EOIR), but still needs to ensure that information recorded is adequate, accurate and up to date, according to the latest assessment from the OECD
The Global Forum on Transparency and Exchange of Information for Tax Purposes evaluated the UK’s handling of requests over the period from 1 April 2014 to 31 March 2017 against the updated standard which incorporates beneficial ownership information of all relevant legal entities and arrangements.
It found that the UK had largely addressed concerns relating to the treatment of bearer shares, which was one of the areas of non-compliance raised in a previous OECD review.
However, the formal procedure to access information from third parties was still judged to be a concern, causing delay to the effective exchange of information and occasionally creating an undue burden to the UK’s partners.
In the 76 cases where the competent authority needs to seek tribunal approval to collect the information, the processes were viewed as too slow, and the UK was also found to asking for more information than was required by the standard.
The UK was nonetheless capable of responding to most requests in a timely manner, and the majority of its partners praised the working relationship established with the UK competent authority, describing it as co-operative and easy to contact.
As a major global financial centre with a large network of EOI mechanisms, the UK received more than 5,200 EOI requests and sent over 1,700 EOI requests during the review period. The largest numbers of inbound requests came from France, India, Poland, Spain and Germany.
One further concern raised in the review related to general partnerships, limited partnerships, and Scottish partnerships without a UK partner or connection, with the suggestion that beneficial ownership and accounting information may not be available for all entities and arrangements.
The review recommended better provision and control of information around such partnerships, and that the retention period in the case of entities which cease to operate through liquidation should be increased to a minimum of five years.
The UK review was one of seven peer review reports released by the Global Forum. Of the other jurisdictions two, Bahrain and Singapore, received an overall rating of ‘compliant’. As well as the UK, Austria, Aruba, Brazil, Saint Kitt and Nevis were judged ‘largely compliant’.
Overall, the OECD said the jurisdictions have demonstrated their progress on many deficiencies identified in the first round of reviews including improving access to information, developing broader EOI agreement networks; and monitoring the handling of increasing incoming EOI requests as well as taking measures to implement the strengthened standard on the availability of beneficial ownership.
Report by Pat Sweet
