The Organisation for Economic Co-operation and Development (OECD) has faced criticism for its updated criteria to identify jurisdictions that have not implemented the tax transparency standards.

The updated standards have helped the USA to avoid being blacklisted for not implementing tax transparency standards, according to Tax Justice Network (TJN).

TJN fired off criticism of the standards claiming that they had been updated in a way which avoids placing its biggest member, the USA, on its blacklist.

The criteria to be ‘white-listed’ requires jurisdiction to meet two of the following three criteria:

  • Implementation of the Exchange of Information on Request (EOIR) standard.
  • Implementation of the Automatic Exchange of Information (AEOI) standard.
  • Participation in the multilateral Convention on Mutual Administrative Assistance in Tax Matters (multilateral Convention) or a sufficiently broad network of exchange agreements permitting both AEOI and EOIR.

However, the update states that a jurisdiction will be considered as failing to comply, regardless of whether it has met two of three criteria, if the jurisdiction is ‘determined to be “noncompliant” overall for its implementation of the EOIR standard’ or if ‘contrary to its commitment to the Global Forum to implement the AEOI Standard by 2018, not met the AEOI benchmark’.

The USA would avoid being blacklisted by the updated criteria as it did not commit to implementing the AEOI standard. TJN notes that a jurisdiction can fail certain factors which measure compliance while still being considered ‘largely compliant’.

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