|Monica Bhatia is
a new entry this year
Monica Bhatia was also in the Global Tax 50
Having led the secretariat of OECD's Global Forum on
Transparency and Exchange of Information for Tax Purposes for
almost six years, Bhatia tells International Tax
Review that 2017 is the year in which the efforts of the
past six years came to fruition.
"Once again, I am happy that the work the Global Forum is
doing is recognised and put forward. So, I'm glad that the
world is seeing what the Global Forum is doing and it's been an
amazing year for big changes," Bhatia says. "Every year seems
really important, but certainly 2017 is really important."
In 2017, almost 50 countries commenced the automatic
exchange of tax information (AEOI) under the common reporting
standard (CRS), with another 50 coming on board in 2018. An
increasing number of developing countries also benefited by
receiving support to improve their tax policies and align
themselves with the international tax standard. The membership
of the Global Forum also grew to 147 members as of December
2017, with more and more developing countries joining
throughout the year.
Further, the Global Forum helped 14 countries to adapt their
tax systems to avoid inclusion in the OECD's list of
uncooperative tax jurisdictions in the wake of the Panama
Papers. "You will recollect last year that we had the Panama
Papers and then the G20 said we had to prepare a list, and then
the OECD prepared some criteria, and jurisdictions had almost a
year to do something so that they didn't end up on the list.
The amazing thing was that we devised a special procedure to
allow the jurisdictions to come and show that they have
actually made changes and in that procedure as many as 14
countries and jurisdictions came forward and were able to
demonstrate that they had made the changes, which was
remarkable because they had made changes in a very short period
of time, and this included countries like Panama, Costa Rica,
and the Dominican Republic."
The efforts made by the Global Forum to encourage countries
to adapt to the international standard is reflected in the
OECD's blacklist, which now only contains one country (Trinidad
"With Trinidad and Tobago, we are now in constant contact
with them, trying to help and support them. The difficulty in
Trinidad and Tobago, however, is the lack of political will to
make the changes, and that's why they have ended up on both the
EU blacklist and the OECD/G20 list. And that's not from a want
of trying from our end, it's just a lack of political will on
The hope next year is to have all countries be tax compliant
and have none on the OECD tax blacklist, but Bhatia says it's
not quite that simple as that because the compliancy criteria
from the OECD/G20 could evolve.
Looking ahead to the coming year, Bhatia believes beneficial
ownership rules will be a key point in discussions. In 2017,
the Global Forum published the results of a round of peer
reviews launched in mid-2016 that included a new focus on the
availability of and access by tax authorities to beneficial
ownership information of all legal entities and arrangements,
in line with the Financial Action Task Force international
standard. "Beneficial ownership is going to be the huge focus
going forward," Bhatia says. Although some countries reviewed
are not doing so well on the beneficial ownership standards,
Bhatia says the Global Forum is working with those countries to
help them improve. "The next two or three years will see a lot
of focus on helping those countries make sure they get it right
on beneficial ownership".
One of the biggest challenges coming up for Bhatia and her
team is to ensure the countries committed to commencing the
AEOI in 2018 deliver on their commitments to carry out
exchanges from September 2018.
"I think we have made tremendous progress in the last four
or five years and the momentum is there and, over the next
year, with 50 more countries coming around to AEOI, and more
and more countries amending their laws and putting in place
transparency measures, I think this will grow. This is an
Bhatia believes that countries outside the CRS network will
start to see the gains of the AEOI and want to join too.
"Things have changed, and going forward there are more and more
countries coming together and a lot of attention needs to be
paid as to how this [exchanged] information is to be exploited
or how this infrastructure is to be used – and that is
really a focusing point. And that will bring about the gain [of
joining this network for countries]."
Another ongoing challenge is addressing the needs of the
Global Forum membership, which Bhatia says is growing at a fast
pace. The technical assistance unit has been established to
deliver on the needs of these new members, with Bhatia
expecting more members to join. "We had 10 new members this
year and by their very nature these new members are developing
countries, they are lower income countries," she says.
"To be able to bring them up to the par for global
standards, as well as to ensure they benefit from all this, a
lot of intense work is required – and part of this we
saw in Togo: our teams were there talking to political leaders
and administration staff, and providing technical assistance,
which is very resource intensive. We just don't want new
countries joining, then failing the peer review process and
then wondering why they are a part of this."
After an eventful 2017 that witnessed big changes in the way
governments communicate and exchange tax data, 2018 holds more
opportunities for the Global Forum to expand and create a
fairer, more transparent tax environment.