Executive summary

Ensuring the correct payment of tax is crucial to maintaining public finances and the public’s trust in the tax system. This has become increasingly challenging for tax authorities, as the financial sector has become increasingly globalised. International cooperation has consequently become the norm, providing tax authorities with the necessary tools to ensure that taxpayers with offshore financial activities meet their domestic tax obligations.

One of the key tools for tax authorities is exchanging information on financial assets held offshore under the Standard for Automatic Exchange of Financial Account Information in Tax Matters (AEOI Standard), which was developed by the OECD, working with G20 countries and subsequently adopted by the Global Forum on Transparency and Exchange of Information for Tax Purposes (Global Forum). The information exchanged includes details of Financial Accounts held by foreign tax residents including, in certain cases, where such Financial Accounts are held through Entities that are controlled by foreign tax residents (defined as Controlling Persons). This helps ensure that tax evaders are at greater risk than ever of being caught and deters them from failing to properly declare their financial activities offshore.

So far, 108 jurisdictions have exchanged information under the AEOI Standard. Information on over 123 million financial accounts was exchanged automatically in 2022, covering total assets of almost EUR 12 trillion. This form of cooperation is set to increase further, with another nine jurisdictions expected to implement the AEOI Standard in the coming years. This move to the automatic exchange of information has had a dramatic impact on taxpayer behaviour and the ability of tax authorities to ensure tax compliance. Nearly EUR 126 billion in tax, interest and penalties have been raised by jurisdictions through voluntary disclosure programmes and other offshore tax compliance initiatives since the commitments were made to implement the AEOI Standard and academic studies have shown that financial investments held in international financial centres have decreased by 20% over the same time period, also linked to the implementation of the AEOI Standard.

Reaching this point is the result of significant investment by governments across the world, all of which needed to introduce new legislation to require Financial Institutions to conduct the detailed due diligence and reporting rules, put in place new international exchange agreements to exchange the information and implement technical and operational solutions to deliver the exchanges in practice. In addition, legal, operational and technical frameworks have been needed to keep the information confidential and secure.

In order to realise the benefits the AEOI Standard has to offer, including maximising the deterrent effect and the usability of the information exchanged, it must be ensured that the AEOI Standard is implemented effectively and on a widespread basis. This is why the G20 called on the Global Forum to monitor and review its global implementation. This started with a commitment process, whereby all Global Forum members, except developing countries that did not host a financial centre, were asked to commit to implement the AEOI Standard. The Global Forum later moved to peer reviews of the effectiveness of implementation. This includes peer reviews of the completeness of the domestic and international legal frameworks implementing the AEOI Standard as well as the effectiveness in practice of the frameworks to ensure compliance by Financial Institutions and of the annual information exchanges.

Following the publication of annual monitoring reports since the first exchanges under the AEOI Standard commenced in 2017, in 2020, the Global Forum published the results of its peer reviews of the legal frameworks of the 99 jurisdictions that committed to commence exchanges in 2017 or 2018. Subsequent reports have included the peer review results with respect to later committers and of reassessments where amendments have been made to the legal frameworks, such as to address recommendations made. In 2022 the Global Forum published the first results of its initial peer reviews of the effectiveness in practice of the implementation of the AEOI Standard, including ratings, again for the first 99 jurisdictions. The Peer Review of the Automatic Exchange of Financial Account Information 2022 (https://doi.org/10.1787/36e7cded-en) therefore includes the first set of comprehensive peer review results, including both assessments of the legal frameworks and their effectiveness in practice.

This report provides an update to the 2022 report. It summarises the latest situation and includes the results of the assessments of the legal frameworks of an additional three jurisdictions (that committed to commence exchanges under the AEOI Standard in 2021), bringing the total to 112 jurisdictions. It also includes the results of reassessments of the legal frameworks of ten jurisdictions. Finally, the results of the initial effectiveness reviews of two additional jurisdictions are included (that committed to commence exchanges in 2019), bringing the total to 101 jurisdictions. While this report contains the detailed analysis and findings of the new assessments, further information on the peer reviews previously conducted can be found in the 2022 AEOI Report.

The results show a very high level of completeness of the legal frameworks, with over 90% of jurisdictions being assessed reaching a determination of “In Place” or “In Place But Needs Improvement”. With respect to the results of the initial reviews of effectiveness in practice, the large majority of jurisdictions are “On Track” with their implementation, including implementing administrative compliance frameworks that are effective in ensuring compliance by Financial Institutions and ensuring the smooth operation of the exchanges in practice.

The results also show that there is more to do to ensure the effectiveness of the AEOI Standard, including retaining a focus on the application and impact of the administrative compliance frameworks as they mature and supporting the jurisdictions that are still in the process of developing their administrative compliance frameworks. In order to retain this focus, the Global Forum put in place a framework for a second round of peer reviews in relation to the effective implementation of the AEOI Standard. These commenced in 2023 and are designed to obtain a deeper level of comfort that jurisdictions are implementing the AEOI Standard effectively, including onsite visits by Assessment Teams where all key stakeholders are met from the public and private sectors. The results of these peer reviews are due to be published in 2025.

This report is structured as follows:

Chapter 1 provides the latest results of the monitoring and peer review processes, including the delivery of the commitments to implement the AEOI Standard, details of the exchanges that took place in 2023 and a summary of the determinations in relation to the AEOI legal frameworks and the ratings in relation to effectiveness in practice for each implementing jurisdiction, including the new and updated ratings from the reviews conducted this year.
Chapter 2 sets out the methodologies for the Global Forum’s peer reviews, including of the AEOI legal frameworks and the initial reviews of the effectiveness of the implementation of the AEOI Standard in practice. It also provides details of the in-depth effectiveness reviews being conducted under the second round.
Chapter 3 contains the jurisdiction-specific peer review reports completed since the publication of the 2022 AEOI Review Report, including the analysis, findings and recommendations made.
Annex A provides information on the exchange agreements that the jurisdictions that have been newly assessed in relation to their legal frameworks they have in place with respect to the AEOI Standard.
Annex B contains the AEOI Terms of Reference, which provides the basis for the AEOI reviews.

The information in this report is up to date as on 17 November 2023. Updates are available on the Global Forum website (www.oecd.org/tax/transparency/documents/key-publications-and-documents.htm#AEOI) and the relevant communication channels that each jurisdiction has in place domestically.

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Disclaimers

This report was approved by the AEOI Peer Review Group on 2 November 2023 and adopted by the AEOI Peers on 24 November 2023. It was prepared for publication by the Secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

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