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New Report on International Tax-Ruling Exchanges

New Report on International Tax-Ruling Exchanges

OECD says over half of last year’s recommendations were addressed


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Countries are mostly being compliant with the OECD's standards for exchanging tax-ruling information, according to a second annual OECD's peer review report. Harmful Tax Practices - 2017 Peer Review Reports on the Exchange of Information on Tax Rulings follows up on several country-specific recommendations that the OECD made last year.

This publication examines affected jurisdictions and considers whether they need to improve their systems for exchanging tax-ruling-related information after agreeing to adopt the BEPS Action 5 minimum standard for countering harmful tax practices. It concludes that 60% of the recommendations issued in the first annual report just one year ago have already been successfully addressed.

Although the OECD examined Canada in its review it did not make any Canada-specific recommendations (this is consistent with its first report). According to this publication, Canada met all of the OECD's terms of reference during its 2017 review.

The BEPS Action 5 minimum standard consists of two parts. One part relates to preferential tax regimes, where a peer review examines whether a particular regime could facilitate base erosion and profit shifting and risk affecting another jurisdiction's tax base. However, this report mainly focuses on the second part of BEPS Action 5, which involves reviewing whether jurisdictions are committing to transparency through the compulsory spontaneous exchange of relevant information on taxpayer-specific rulings.

This report looks at the 2017 year. It lists 60 jurisdiction-specific recommendations for improving the timeliness of the exchange of information, ensuring that exchanges of information are made under preferential tax regimes for income from intellectual property, and other things. It looks at 92 individual jurisdictions, up from the 44 it reviewed in the last report. During the period of time under review:

  • Nearly 16,000 relevant tax rulings were issued
  • Almost 21,000 exchanges of information took place by December 31, 2017
  • All jurisdictions have either already implemented the necessary legal framework for spontaneous exchange of information on rulings, or have undertaken steps to do so
  • 29 of the 49 recommendations from the previous year's peer review have been actioned and removed.

The next annual peer review will take place in 2019. It will continue to track different jurisdictions' progress, and which actions they have taken to respond to recommendations. It will also include updates on statistics on the exchanges of information.

For more information, contact your KPMG adviser.

Information is current to January 08, 2019. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500

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KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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