ATAF-EC-URA TECHNICAL CONFERENCE ON EXCHANGE OF INFORMATION AND TAX TREATIES Kampala, Uganda 19-20 April 2012

1. Ministry of Finance, Norway ATAF-EC-URA TECHNICAL CONFERENCEONEXCHANGE OF INFORMATION AND TAX TREATIESKampala, Uganda 19-20 April 2012 SESSION 5: “THE VARIOUS AGREEMENTS BETWEEN STATES” – THE NORDIC EXPERIENCE Per O. Gjesti Deputy Director General Ministry of Finance Norway

2. The Nordic Countries

3. Regional cooperation in internationaltax matters • Similar legal and administrative systems • ”Commonlanguages”-ability to understand texts – notranslation • ”Home market” for inter-regional trade, finance, labour • And ”one market” for multinationals • Transfer pricing and CUP

4. Nordic multinationalAgreements • Agreementon Administrative Assistance 1972 • (Multinational DTA 1980 – no EOI article) • AAA covers all direct and indirecttaxes, exceptcustomduties • EOI both automatic, spontaneous and on request, assistance in collection, simultanoeus audits • Regularmeetingson policy, ad hoc groupsonspecific cases – the personal contacts

5. ISSUES I will speak about the lessons from: • Regional cooperation • The Nordic Agreementon Assistance in Tax Matters • The OECD/CouncilofEurope multilateral, and thetransformation to a global instrument • The Nordic TIEA Project • The Global Forum on Transparency and Exchange of Information

6. Nordic AAA – informationsharing • Trends in aggressive tax planning and evasion techniques • Experiencewithexisting and newregulations • Detectiontechniques and methods • Simultaneous audits, audit selection and organisation • Presence at audits in othercountries • Nordic AAA model for OECD/CoEmultinational

7. OECD/CoEmultinational 1980-87 • Originally open for members only – limited accession • Ability to reserve againstindirecttaxes, recovery, automatic EOI • Butreservationsmay be withdrawneasily and administratively! • Coordinating Body: CompetentAuthoritiesof all signatories • Express mandateof CB to discuss and proposeclarifications and developimprovements

8. OECD/CoEbecomes Global Instrument • G 20 2009: The need for a multilateral global instrument • CB: Mandate to developtheOECD/CoE, withSecretariatsof OECD and CoE • The OECD standard for EOI: Eliminate bank secrecy, unknown beneficial ownership and own tax interest as obstacles to EOI • Open for all countriesthatmeetthe standards ofthe Global Forum PRP includingtaxsecrecy and taxpayerprotection • In force 2011

9. The Multinational • Applications from non-membersofOECD/CoEconsidered by CB – approval by consensus • All OECD members and observers (exceptSwitzerland) have declaredthattheywill sign • All G 20 likewise • A large numberofsignatures have beenreceived • How to join: http://www.oecd.org/document/14/0,3746,en_2649_33767_2489998_1_1_1_1,00.html

10. OECDs HarmfulTaxPractisesproject • Background: ”Race to thebottom” – growingnumberofpreferential regimes in OECD states • 1998 Recommendation: Identify and eliminateharmful regimes in memberstateswithin 2005 • Stopoutflow to tax havens: invitethem to commit to transparency or face defensive measures • 38 jurisdictionsdefined as tax havens • TIEA-Model: drafted by the first 11 committedjurisdictions and 11 OECD members

11. TIEAs • Oblige to exchangeonrequestinformation from banks and financialinstitutions, ownership and withoutowntaxinterest • Practicalchallenge: bilateral agreements, formal requirements, lackofresources and experience • Smallcountries back in thequeue • Nordic Council of Ministers decided to launch project: common negotiations that lead to 7 bilateral agreements. Strength in numbers

12. Nordic TIEA Project • Approved by Nordic Council of Ministers in 2006 • Strengthen the Nordic negotiating position • Keep costs for negotiation work down – joint teams • Exchange of InformationSteering Group • Denmark, Sweden, Finland, Greenland, Iceland, Norway and The Faroe Islands • Project Manager • Employed by Nordic Council • Project will continue to the end of 2012

13. Nordic TIEA Project • Prioritiesaccording to reportedneedsofnordictaxauthorities • Slow start butable to sign withimportantfinancialcenters: • Isle of Man 30 October 2007 • Jersey 28 October 2008 • Guernsey 28 October 2008 • Cayman Islands 1 April 2009 • Bermuda 16 April 2009 • British Virgin Islands 18 May 2009 Difficult discussions on the “level playing field”, still bank secrecy in some OECD members

14. Nordic TIEA Project – externaldevelopments • G 20 statement in early 2009: fundamental change, ”the end of bank secrecy” • OECD members all approvethe OECD standard • Establishment ofthe ”Global Forum onTransparency and Exchange ofInformation ” in Mexico July 2009 • All the 38 jurisdictionsdefined as tax havens nowcommit to the standard and becomemembersof GF

15. Nordic TIEA Project • Becauseofthesedevelopmentsthenegotiationsincreasedsharply • We have nowsignedTIEAswith 36 jurisdictions, 25 are in force, 3 more drafts areinitialled. • The aim is to concludeTIEAs or equivalentwith all closedfinancialcenters, 43 jurisdictions have beenidentified • We wish to eliminate the possibilities for our taxpayers to hide in safe havens

16. Nordic TIEA Project • Whatifwe do not succeed? • Weare in negotiationswith all theremaining 5 • Theyare all membersof GF and will have to fulfilltheircommitmentthere • Ifthere is a final refusalwewill have to consider defensive measures • Ourexperiences so far areverypromising, information is provided and millions have beencollected

17. Lessons from the Nordic TIEA Project • The general preventive effect is hard to measure, but the rise in the number of voluntary disclosures is remarkable • Joint negotiations save resources and time, and there is strength in numbers • Is this a way to follow for ATAF? I definitely think so, but it requires that you can agree on similar models, policies and tactics and are able to ”speak with one voice” towards the other party. The toughestdiscussions for us have beenbetweenthe Nordics!