Monaco and UK TIEA
A Tax Information Exchange Agreement (TIEA) has been signed between Monaco and the UK. Its entry into force is subject to both countries completing Parliamentary procedures and an exchange of diplomatic notes. The TIEA was signed by Monaco and the draft text published in late January. No date has been given as to when the TIEA might be expected to enter into force.
It is important to note at the outset that the exchange of tax information is subject to various safeguards and is exchanged only on the submission of a detailed request to the other party; it is not an agreement for the automatic exchange of information.
The Agreement requires that when submitting an application for information the applicant party must provide:
1. The identity of the person to which the application relates;
2. A statement detailing the information sought;
3. The period for which the information is requested;
4. The tax purpose of the request;
5. The grounds to believe the information is available in the jurisdiction of the other party;
6. A statement that the request confirms with the law and practise of the applicant; and
7. All means have been pursued to obtain the information in its own jurisdiction.
The applicant party must further demonstrate that the requested information is foreseeably relevant to:
1. The determination, assessment and collection of taxes;
2. The recovery and enforcement of claims for tax; or
3. The investigation or prosecution of tax claims.
These safeguards are designed to prevent generalised or open ended requests for information by one party to the other, ie ‘fishing expeditions’. It is also possible for the party in receipt of the request to decline to obtain or provide the information requested, in certain circumstances including:
1. The request does not comply with the terms of the Agreement;
2. The information could not be obtained under the laws of the requesting party;
3. The disclosure of information would be contrary public policy.
The Agreement does not require the party which has received a request, to obtain and provide information that it is not required to obtain under the laws of its own jurisdiction. The effect of this provision is to limit the obligation on the party providing the information, to provide information it has collected for the administration and enforcement of the laws applicable in its jurisdiction, to the requesting party.
The TIEA applies to all UK taxes and Monaco taxes relating to corporate profits tax, inheritance and gift tax.
All information provided is required to be kept confidential by the receiving party and used only in connection with its tax administration.
For more information on this subject please contact Peter Brigham firstname.lastname@example.org