What is the precise meaning of Automatic Exchange of Information (AEOI)?

- Why do Japanese have a lot of issues about it?

Automatic Exchange of Information (AEOI) agreement is an effort to minimize tax evasion and ensure that taxpayers pay their tax to the relevant tax authorities.

On July 15th, 2014, the Common Reporting Standard (CRS) that was created in reaction to the G20 request was confirmed by the OECD council.

It required jurisdictions to gain information from their financially supporting agencies and then transfer it annually with other jurisdictions.

It specifies the sort of financial information to be transferred, the reporting institutes,

different account kinds or taxpayers involved and the usual timely diligence processes these institutes need to follow.

Many countries are involved in making Automatic Exchange of Information (AEOI) agreements.

These agreements let information transfer occurs among tax authorities in a variety of countries concerning financial

accounts or investments that aid in collecting tax from all.

List of countries that agreed to share information

Domestic tax authorities are capable of obtaining information on non resident bank account owners from such financial institutes as banks, building communities,

insurance companies, and investment companies. Once obtained, this information will be shared with relevant countries.

As a package, AEOI is comprised of four components within OECD’s Standard for the Automatic Exchange of Financial Account Information (explained below).

1. International/intergovernmental agreements: If two countries intend to act out the AEOI standard together, they need to form an intergovernmental agreement. To this aim, a model convention is offered by OECD, Competent Authority Agreement or CAA. Only those states which have the power to enforce the new standard in the country can use these models.
2. Common Reporting Standard The authentic AEOI standard is included in the Common Reporting Standard (CRS) which has to be transferred to the national law.
3. Commentary on interpretation The Competent Authority Agreement (CAA) and the Common Reporting Standard (CRS) are proved by commentaries on interpretation. There are instances include too.
4. Technical implementation guidelines These guidelines specify what is technically needed to transfer data among tax authorities. These guidelines determine how we are to be ensured of data security.

• The following information of newly opened account will be exchanged between jurisdiction participants. This includes the old accounts opened from January 1st, 2016.
• Every account owner`s name, address, tax identification number (TIN/My Number)
• financial institute’s name and ID number
• and ...

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