In the near future, international data exchange in tax matters will revolutionize taxation procedures in Germany and other countries. Due to the taxation of worldwide income in many countries, one observes the revenue authorities' deficits with regard to foreign situations, because the ability to investigate on a national level general ends at the national borders. In light of increased mobility of persons, goods and capital, it is obvious that the national tax authorities are limited in determining the authoritative tax-related circumstances. The taxpayers' obligations to cooperate and inform that have been established in the meantime with regard to foreign situations (inter alia Secs. 90, subsections 2 and 3, 138 para. 2 German Fiscal Code (AO), Secs. 16, 17 German Foreign Transaction Tax Act (AStG), Sec. 30 para. 3, sentence 1 clause 2 German Inheritance and Gift Tax Act (ErbStG)) have not led to the desired elimination of the informational disadvantages on the part of the tax authorities. The direct exchange of tax data between the tax authorities of individual countries is supposed to remedy this state of affairs.
The international exchange of data in tax matters can be classified into the following instruments:
exchange of information upon request, automatic exchange of information, spontaneous exchange of information. The sources of the law on the international exchange of data are very different; to some extent they overlap and in part they are independent and parallel. In addition to bilateral treaties with disclosure clauses (e.g., double taxation treaties), there are many multilateral treaties on data exchange and administrative cooperation with regard to tax matters. With the EU Mutual Assistance Directive, there are also EU standard provisions for the exchange of tax data, which in part clearly transcend the regulations of the existing multilateral treaties. In Germany, the instruments for tax data exchange were primarily implemented by way of the Financial Accounts Information Exchange Act (FKAustG) of 21 December 2015 and the EU Mutual Assistance Act (EUAHiG) of 26 June 2013.
Information Exchange upon Request
Older double taxation treaties only provide for information exchange upon request for the purpose of implementing the treaty ("minor disclosure clause"). In contrast, current double taxation treaties, as well as recently concluded Tax Information Exchange Agreements with many "tax havens", contain a "major...