This year, the G8, G20 and OECD all committed to developing AIE as the new standard for information exchange. It is set to replace the current standard of information on request, which suffers from three intrinsic problems: i) quite often, in order to know what information to request, you will already need to know a significant amount of information - and indeed, what you receive may simply confirm what you already know; ii) the process is exceedingly slow; iii) it is manpower/ resource intensive.
The make automatic inforamtion exchange also useful for developing countries, the briefing paper gives the following recommendations:
• The working group designing the new standard should seek participation from developing countries, and should have the applicability of the new standard for developing countries as a criterion by which the standard is to be assessed.
• The new multilateral instrument should offer asymmetry on reciprocity of information for developing countries during a transitional period.
• The new multilateral instrument should be free for any willing entrant to join, with no conditions to surrender or alter any fiscal or economic policy unrelated to AIE in return for participation.
• There must be transparency over the scale and volume of data being exchanged, to enable accountability at country level.
• Donor countries should commit to a long-term coordinated capacity building programme.
• Capacity building should be focused on maximising benefits to developing countries - ie, on securing and using data before reciprocity.
• Developed countries should develop further their mechanisms to collect and share more useful information for developing country tax authorities (for instance, through public registers of beneficial ownership and declarations of high-risk transactions).