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The role of judicial cooperation in the fight against tax evasion and tax avoidance in the CEMAC zonepar Frank Patrick MEUTCHEDJI FONGANG Institut des Relations Internationales du Cameroun (IRIC) - Master II 2018 |
SECTION II: THE ADMINISTRATIVE ASPECT OF THE COOPERATIONThe administrative pace of cooperation in the fight against tax evasion and avoidance was set by the Global Forum on Transparency and Exchange of Information148(*) for Tax Purposes by the year 2000. The Global Forum represents the multilateral approach for implementing internationally agreed standards of transparency and exchange of information in tax matters. Mutual administrative assistance in tax matters in the CEMAC zone is based on convention n°17/65-UDEAC-38 of 14th December 1965 inherited from UDEAC. This convention constitutes the basic instrument of cooperation between the Community authorities in the context of the fight against tax evasion, tax avoidance and money laundering. In this section of our work, an overview of administrative assistance in tax matters by means of the exchange of information for tax purposes in the CEMAC zone will be done. This can be summed in two aspects relating to the procedures for exchanging information (paragraph I) and the nature and characteristics of this information (paragraph II). PARAGRAPH I: THE MODALITIES OF EXCHANGE OF INFORMATION Section 3 of the CEMAC convention mutual assistance in tax matters provides that, The exchange of information takes place, either automatically149(*)(A) or on request (B) relating to concrete cases. The competent authorities of the Contracting States agree to establish the list of information which must be provided automatically. A: the automatic exchange of information Conceptually, automatic exchange of information involves the systematic transmission of information between tax administrations. In concrete terms, the country of the source of the income sends the information to the country of residence of the taxpayer on a regular and continuous basis. In this respect, automatic exchange differs from exchange on request. For the rest, the competent authority of the State of residence remains bound by official secrecy and undertakes in principle to use the information received only for the purposes of the tax procedures that in fighting against tax evasion and tax avoidance.150(*) B: administrative assistance on request Exchange of information on request corresponds to a situation in which a competent authority requests specific information from a tax authority found in a different country. Normally, the information requested relates to a control, inquiry or investigation into the tax payable by a taxpayer for specific financial years. Before sending a request, the requesting tax administration shall use all means available in its territory to obtain the information except where obtaining it would give rise to difficulties. The efforts of the requesting tax administration should also include attempts to obtain the information from the foreign tax administration before making a request. For example by using the Internet and where possible, by using commercial databases or by instructing diplomatic personnel stationed in that country to obtain publicly available information. The OECD has developed a reference guide to sources of information abroad to help competent tax authorities identify the types of information available in other countries.151(*) The request of information by a competent tax administration must be made in writing. However, in case of urgency, an oral request may be accepted, if permitted by applicable laws and procedures in force provided that, such request is followed by written confirmation. At the request of member countries wishing to have a fast and secure method of exchanging information electronically, the OECD has developed a procedure for the transmission of confidential information using encrypted documents attached to e-mails.152(*) The information exchanged have a specified nature and characteristics. PARAGRAPH II: THE NATURE AND CHARACTERISTICS OF INFORMATION EXCHANGED It is important to note that, the information thus exchanged between tax administrations are of a secret nature and are communicated only to the persons responsible for the assessment or collection of the taxes. The Contracting States undertake to lend mutual aid and assistance to recover due taxes of any kind. This competition extends to penalties, additional fees, fines and costs of any kind, including those inherent in delays in payment and resulting prosecution. This assistance also extends to parafiscal claims. In a nutshell we are concerned here with the characteristics of the requests made (A) as well as their nature(B). A: the character of information contained in the request Upon analysis of the OECD model conventions relating to administrative assistance, requests are confidential (1) and obey the principle of reciprocity (2). 1: the confidentiality of the information All the information exchanged are kept secret and they must only be made accessible to the persons or authorities concerned by the taxation or the recovery,153(*) the execution or criminal prosecution, as well as by the decisions on the appeals relating to such taxes or persons. The commentary to the model OECD convention specifies that the rules of confidentiality apply to the information contained in the request for administrative assistance as well as to the information transmitted to the requesting State.154(*) The idea behind the concept of reciprocity is that a contracting party should not be able to avail itself of the other contracting party's information system if that system is more extensive than its own155(*). The requested Party may refuse to provide the information where the requesting Party cannot obtain or provide such information on the basis of its law or where its administrative practices (e.g. lack of sufficient administrative resources) result in a lack of reciprocity. However, it is admitted that, a rigorous an application of the principle of reciprocity might limit the effectiveness of the exchange of information and that this notion should be interpreted in a broad and pragmatic way taking into consideration the nature of the information exchanged. The CEMAC convention has not expressly given the indications about what should be contained in a request for administrative assistance. Reference is therefore made on the OECD model convention. Section 26 OECD Model Convention does not define what information the requesting State is required to provide in a request for administrative assistance. If an agreement does not provide any information on the necessary content of a request for information and that no other regulations defined the information that must be contained in the request, the request must contain the information listed in section 26 of the OECD model agreement: - the identity of the person(corporate or physical) concerned; - indication of the information sought; - the tax purpose for which the information is requested; - the reasons which lead to believe that the information requested are found in the requested State; - the name and address of the alleged holder of the information - a statement confirming that the requesting authority could not obtain the information under its domestic law and that it has used all means available under its national tax procedure. * 148This forum was restructured in 2009 and works under the auspices of the OECD and G20. Its mission is to implement the international standard through two phases of peer review process. It addresses tax evasion, tax havens, offshore financial centres, tax information exchange agreements, double taxation and money laundering * 149 Since the entry into force of the new commentary to section 26 of the OECD Model Tax Convention in July 2012 requests for a particular case as well as grouped requests are now possible. On the other hand, neither the automatic exchange of information nor spontaneous administrative assistance are still part of the Community standard at the present time * 150 Joël Samuel NZIE, Op.cit. * 151 Ibid. * 152 Ibid. * 153Section 2 of Act No. 17/65-UDEAC-38 of 14th December 1965. * 154 section 26(2) Model Convention of the OECD and related commentary * 155 Article 26, paragraph 3, sub-paragraphs a) and b) of the Model Convention and article 7, paragraph 1 (first sentence) of the Agreement, article 21, paragraph 2, sub-paragraphs a) and c) of the Council Convention of Europe/OECD |
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