Asset Protection Blog – Asset Management – Asset Allocation

If you invest or do business internationally, you need to know about double taxation agreements, more commonly called “tax treaties.”  These agreements are designed to avoid or at least minimize double taxation.  However, they have another, less publicized function: to facilitate information exchange to help enforce domestic tax laws.  One of the consequences of the political firestorm in recent months over bank secrecy laws in Switzerland and other offshore financial centers is that information exchange through tax treaties will become increasingly common. Tax treaties are based on a model treaty prepared by the Organization for Economic Cooperation and Development (OECD).  The OECD regularly updates its model treaty.  Each successive model provides tax authorities greater powers to retrieve financial information from the other signatory.  This is accomplished via the “Exchange of Information” provision in the model treaty; Article [...]