Exchange of Information on Request (EOIR)

Article 26 of the Model Tax Convention - Exchange of Information [read]

Tax Information Exchange Agreement [read]



Under the EOIR framework, all the double tax treaties (DTT's / DTA's) and tax information exchange agreements (TIEA's) are not working, unless a treaty state takes the initiative to make a request, which is foreseeably relevant to the administration or enforcement of its domestic tax rules, to another treaty state in accordance with the agreed-upon procedures.


Under the AEOI framework, a reporting financial institution resident in state [A] will automatically disclose to its treaty state [B] the information about the bank accounts maintained with the reporting financial institution in state A and held by the tax residents of state B.





Article 26 of the OECD Model Tax Convention 



Article 26 provides for a basis on which countries negotiate and conclude double tax agreements.



1. The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their political subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2.

2. Any information received under paragraph 1 by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State and shall be disclosed only to persons or authorities (including courts and administrative bodies) concerned with the assessment or collection of, the enforcement or prosecution in respect of, the determination of appeals in relation to the taxes referred to in paragraph 1, or the oversight of the above. Such persons or authorities shall use the information only for such purposes. They may disclose the information in public court proceedings or in judicial decisions. Notwithstanding the foregoing, information received by a Contracting State may be used for other purposes when such information may be used for such other purposes under the laws of both States and the competent authority of the supplying State authorises such use.

3. In no case shall the provisions of paragraphs 1 and 2 be construed so as to impose on a Contracting State the obligation:

a) to carry out administrative measures at variance with the laws and administrative practice of that or of the other Contracting State;

b) to supply information which is not obtainable under the laws or in the normal course of the administration of that or of the other Contracting State;

c) to supply information which would disclose any trade, business, industrial, commercial or professional secret or trade process, or information the disclosure of which would be contrary to public policy (ordre public).

4. If information is requested by a Contracting State in accordance with this Article, the other Contracting State shall use its information gathering measures to obtain the requested information, even though that other State may not need such information for its own tax purposes. The obligation contained in the preceding sentence is subject to the limitations of paragraph 3 but in no case shall such limitations be construed to permit a Contracting State to decline to supply information solely because it has no domestic interest in such information.

5. In no case shall the provisions of paragraph 3 be construed to permit a Contracting State to decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person.


[Our comment] Paragraph 3 is an exception to paragraphs 1 and 2, while paragraph 5 is an exception to paragraph 3.



Tax Information Exchange Agreement (TIEA)




The purpose of this Agreement is to promote international co-operation in tax matters through exchange of information.  It was developed by the OECD Global Forum Working Group on Effective Exchange of Information.

The Agreement grew out of the work undertaken by the OECD to address harmful tax practices. The lack of effective exchange of information is one of the key criteria in determining harmful tax practices. The Agreement represents the standard of effective exchange of information for the purposes of the OECD’s initiative on harmful tax practices. 

This Agreement, which was released in April 2002, is not a binding instrument but contains two models for bilateral agreements.  A large number of bilateral agreements have been based on this Agreement. 







Spontaneous exchange of information

The provision of information to another contracting party that is foreseeably relevant to that other party and the information has not been previously requested. Because of its nature, spontaneous exchange of information relies on the active participation and co-operation of local tax officials (e.g. tax auditors, etc). Information provided spontaneously is usually effective since it concerns particulars detected and selected by tax officials of the sending country during or after an audit or other types of tax investigation. 


Reference to EOI