At the request of the Requesting State, the Requested State shall provide the Requesting State with any information referred to in Article 4 relating to specific persons or transactions. If the information available in the tax files of the Requested State is not sufficient to comply with the request for information, that State shall take all relevant measures to provide the Requesting State with the requested information. All decisions regarding the implementation of the tax audit are taken by the requested State.
1 Matters relating to any period beyond which a tax claim cannot be enforced shall be governed by the law of the requesting State. If the request for assistance is granted, the requested state informs the applicant country as soon as possible of the action taken and of the result of the assistance. 1 Nothing in this Convention shall affect the rights and guarantees secured to persons by the laws or administrative practice of the requested State.
If such proceedings are instituted, the applicant state will notify the requested state which will suspend the procedure pending the decision of the relevant body.
SPECIAL PROVISIONS
Notwithstanding the provisions of paragraphs 1, 2 and 3, information received by a Party may be used for other purposes when such information may be used for such other purposes under the laws of the supplying Party and the competent authority of that Party so authorized use. Information provided by a Party to another Party may be transferred by the latter to a third Party, subject to prior authorization by the competent authority of the former Party. Proceedings relating to measures taken by the applicant State in terms of this Convention, in particular those in the field of recovery relating to the existence or the amount of the tax claim or the instrument allowing its enforcement, must only the appropriate body of that state.
As soon as the final decision in the procedure is issued, the requested State or the requesting State, as the case may be, shall inform the other State of the decision and the consequences it has for the request for assistance. The contracting party may ask the coordinating body for an opinion on the interpretation of the provisions of the convention. When problems or doubts arise between two or more Contracting Parties regarding the implementation or interpretation of the Convention, the competent authorities of those Contracting Parties shall endeavor to resolve the matter by mutual agreement.
Requests for assistance and responses thereto shall be drawn up in one of the official languages of the OECD and of the Council of Europe or in any other language mutually agreed between the Contracting States concerned.
FINAL PROVISIONS
This Convention shall be open for signature by the Member States of the Council of Europe and the Member States of the OECD. This Convention shall enter into force on the first day of the month following the expiration of a period of three months after the date on which five States have expressed their consent to be bound by the Convention in accordance with the provisions of paragraph With respect to such territory, the Convention shall enter into force on the first day of the month following the expiration of a period of three months following the date of receipt by the Depositary of such declaration.
The withdrawal becomes effective on the first day of the month following the expiry of a period of three months after the date of receipt of such notification by the depositary. Such termination shall take effect on the first day of the month following the expiration of a period of three months after the date of receipt of the notice by the depositary. The custodian who receives a communication or makes a notification in terms of the provisions of paragraph 1 must immediately notify the other custodian.
States A and B may exchange information on the nature and value of the services so provided.
GENERAL DEFINITIONS
Annex A describes the taxes in force in the Contracting States on the date of signature of the Convention and to which the Contracting States wish the Convention to apply. The taxes in a contracting state to which the convention applies appear in Annex A in categories mentioned in subsection 1. On the one hand, it allows each state, after the entry into force of the Convention, to amend the list in Annex A either by deleting or by adding taxes referred to in paragraph
For the sake of simplicity, the term "tax" is used throughout the Convention to denote all types of taxes (including social security payments) covered by the Convention in accordance with Article 2. This follows from the definition of the term "tax claim" under c, that the assistance should not only be limited to the actual tax, including additions and surcharges, but also to cover interest on arrears of tax and costs incurred in recovery. Some states consider that assistance with recovery should be limited to the recovery by the requested state only of interest due up to the date of the request.
Some other countries, on the contrary, consider that the recovery assistance should also apply to interest due under the rules in force in the requesting country until the date of actual recovery of the tax claim. The text of the instrument does not include a definition of administrative fines and this issue is governed by domestic legislation. On the other hand, some countries have provisions for risk assessments and these assessments1 are covered by the Convention.
This is because, taking into account the scope of the Convention as defined in the instrument (Articles 1 and 4) and the differences between states in the matter of organization and operation of state departments and the state in general, it is not possible. to establish uniform rules in this regard; in some states, for example, the competent authorities will normally be the tax authorities or services, while other bodies in other states may perform certain tasks related to administrative assistance in this area. If it does so, it is obliged to do what is necessary to prevent the change from adversely affecting the other Parties or the general application of the Convention. It must usually notify the change through one of the custodians, issue directives or instructions for the future performance of ongoing assistance activities and communicate those directives or instructions to the parties or persons concerned.
The term "citizens" is defined in e based on the definition in Article 24, paragraph 2, of the OECD Model Convention on Double Taxation. This paragraph lays down a general rule of interpretation, which gives priority to the specific definitions in the Convention itself, and then to the meaning of the relevant term in the law of the state which applies the Convention in the relevant case, except where the context clearly indicates a different meaning.
FORMS OF ASSISTANCE FORMS OF ASSISTANCE
It is in the interest of the requesting state to specify the motives for the request as thoroughly as possible. The representative(s) of the competent authority of the applicant state may only be present for the relevant part of the tax investigation. The paragraph also regulates the manner in which the tax claim of the applicant state must be recovered by the requested state.
Where a request for assistance meeting the conditions of the Convention has been received, the requested state will have to take steps to recover the tax claim from the applicant state. However, other states will not be able to recover the tax claim of the applicant state within their territory without further measures. This means that the priorities enjoyed by the requested state for the recovery of its own tax claims are not automatically extended to the tax claims of the applicant state.
This article allows the requested State to refuse to respond to the request if it considers that the requesting State has not made adequate use of the resources available on its own territory. The basis for such a refusal is the additional burden that the request for assistance places on the administrative apparatus of the requested State. This paragraph requires the requested State to inform the requesting State as soon as possible of the action taken and the outcome of the assistance.
However, the requested state does not normally have to provide every detail of the reasons for refusing the request (for example why it considers certain measures to be contrary to public policy). The aim is to make the information more useful to the country in question. Sub-paragraph f is designed to ensure that the Convention does not result in discrimination between nationals of the requested State and identically located nationals of the applicant State.
This article indicates in which country the taxpayer must contest a measure taken by an authority of the requesting country or the requested country. In particular, they do not cover actions opposing the implementation of the Convention itself, either by the applicant state (actions opposing the request for assistance) or by the requested state (actions opposing the obligation to provide assistance). In the same way, the requested state must inform the requesting state about the outcome of the proceedings initiated in its territory.
Another basic rule seems to be that neither the requested country nor the requesting country has any claim on the taxpayer's funds. These principles can best be implemented if the requested country assumes that the claim is in the currency of the requesting country until recovery occurs. The exchange rate on the date of recovery then determines the amount in the requested country's currency to be recovered.
