The move is part of attempts to have the country removed from EU tax blacklist

Durrant Pate/Contributor

Trinidad and Tobago (T&T) has formally joined the Organization for Economic Cooperation and Development (OECD) global tax transparency agreement on combating tax avoidance and evasion by multinational corporations.

In making the announcement at its Paris, France headquarters on Thursday, the OECD disclosed that the twin-island Caribbean republic has become its latest signatory to its Multilateral Convention on Mutual Administrative Assistance in Tax Matters. T&T’s Finance Minister, Colm Imbert flew to Paris to sign the treaty on combating tax avoidance and evasion on behalf of his country.

This is part of the measures being taken by the government to have the country removed from the European Union tax blacklist. Last month, the European Union removed Antigua and Barbuda from its list of non-cooperative jurisdictions for tax purposes but kept T&T and Anguilla list, describing them as countries that do not cooperate with the EU or have not fully met their commitments.

Significant of T&T’s signing

With T&T joining the treaty, the total number of jurisdictions participating in the Convention is now 149. Jamaica joined on November 11, 2018. By signing T&T the world’s widest reaching international treaty for international tax co-operation and exchange of information and further strengthens the reach of the Convention in the Caribbean. 

The signing will pave the way for T&T to engage in the exchange of information with 148 other jurisdictions, including all major financial centres. These exchange relationships will be added to the over 8000 exchange relationships already in place under the Convention.

The Convention enables jurisdictions to engage in a wide range of mutual assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. It guarantees extensive safeguards for the protection of taxpayers’ rights.

Automatic exchange of information in tax matters

The Convention is the primary instrument for swift implementation of the Standard for Automatic Exchange of Financial Account Information in Tax Matters, developed by the OECD and G-20 countries enables more than 110 jurisdictions to automatically exchange offshore financial account information. Beyond the exchange of information on request and the automatic exchange pursuant to the Standard, the Convention is also a powerful tool in the fight against illicit financial flows.

It is a key instrument for the implementation of the transparency standards of the OECD/G20 Base Erosion and Profit Shifting Project. It is in this vein that T&T also signed the Multilateral Competent Authority Agreements for the automatic exchange of information and Country-by-Country Reports. 

The OECD is a global standard setter and consensus facilitator to tackle tax evasion and avoidance. Working to enhance tax transparency and exchange of information between tax administrations, it has contributed to ending bank secrecy for tax purposes. In 2022, information was exchanged on 123 million bank accounts worth EUR 12 trillion. The international standards developed by the OECD provide for transparency and exchange of information on request (EOIR) and for automatic exchange of financial account information (AEOI). The Convention on Mutual Administrative Assistance in Tax Matters requires the Competent Authorities of the Parties to the Convention to mutually agree on the scope of the automatic exchange of information and the procedure to be complied with.