51 countries sign up to automatically exchange financial information

The Organisation for Economic Co-operation and Development (OECD) announced that 51 countries have signed its Multilateral Competent Authority Agreement, allowing them to automatically exchange financial information with each other. Most adopters of the agreement are expected to start exchanging information in September 2017; other countries will follow suit in 2018.

The agreement implements the OECD’s Standard for Automatic Exchange of Financial Information. Countries that are party to the agreement will collect information from their domestic financial institutions and annually share it with the other countries.

The financial information to be reported under the standard includes investment income from interest and dividends and similar types of income. It also includes account balances and sales proceeds from financial assets. Banks, custodians, brokers, and certain collective investment vehicles and insurance companies are required to report and are subject to due-diligence rules to identify reportable accounts.

The United States, which is pursuing similar information under its Foreign Account Tax Compliance Act (FATCA), did not sign the agreement.

—Alistair M. Nevius (anevius@aicpa.org) is CGMA Magazine’s editor-in-chief, tax.