'Gatca' Information Exchanges Agreement Signed

Last week, at a meeting in Berlin, 51 Organization for Economic Co-operation and Development and Group of 20 countries endorsed a standard for the automatic exchange of tax-related information across borders. The co-operative initiative is aimed at reducing tax evasion in countries from Singapore to France.

The countries signed a Multilateral Competent Authority Agreement that will see the first information exchanges launched by September 2017. The dates had previously been uncertain.

The Global Account Tax Compliance Act, or "Gatca," as the agreement has been called, was inspired by the US Foreign Account Tax Compliance Act (Fatca) and its reporting requirements. The regulations present challenges for market participants on data management and reporting obligations.  

"This is a very significant development. It has increased the momentum behind the AEI [automatic exchange of information] project and once again emphasizes that Fatca is no longer the only taxpayer data exchange program that people need to be aware of," says Thierry Haensenberger, Luxembourg-based senior vice president of business development, Europe, Middle East and Africa at reporting and risk management service provider AxiomSL.

"Regarding related reporting requirements, it is clearer than ever that the only viable way to get ready, in an economically sustainable way, for this game-changing deadline in 2017 is by addressing Fatca reporting requirements using a platform that is able to scale up flexibly, in reporting scope, volume and potential reporting format variations."