Tax authorities must future-proof systems for EOIR

The systems underpinning the exchange of information need to be flexible and strong enough to meet ever-changing requirements. Tax authorities need to ensure they have the frameworks that are capable of meeting updated standards. 

The exchange of information on request (EOIR) is an internationally recognised standard, where a tax authority requests information from another authority in connection with an investigation. 

It seeks to improve tax transparency by addressing offshore tax evasion, strengthening compliance, and raising tax revenue collection. In the last 10 years, over 250,000 requests for information have been sent, enabling the global collection of more than €7.5 billion in additional tax. 

Challenges with EOIR 

In recent years, tax authorities have seen a significant increase in both the sending and receipt of EOI requests. While EOI requests are becoming increasingly complex, due to the challenges in compiling various documents from multiple sources.

For many EOI units, this is becoming resource-intensive, time-consuming, and costly, increasing the risk of a poor compliance rating during the OECD EOIR Peer Review process.

Many tax authorities receive poor compliance ratings for element C5 (Quality and Timeliness of Responses). That means they have failed to adhere to the 90-day standard for information or update or didn´t ensure confidentiality and security of EOI requests and collected information. To tackle these challenges, tax authorities need help from technology.

Upgrading systems to meet commitments

Having a strong, flexible, and a scalable technological solution to deal with EOI requests is key. What does good system capabilities look like?

All processes associated with the collection, validation, cross-border exchange, and analysis of information are automated and secure so you can focus your resources where they are needed most. 

Automatic updates and future-proof system to ensure compliance and improve reputation so you can focus on collaboration with FIs, MNE community and treaty partners. 

Information collected enables extensive analysis and helps identify emerging risks so you can make better decisions and improve your regulations.

Having all of these in place will help improve compliance rating and adherence to the 90-day standard, optimise and automate work making it easier for EOI units to process the requests, monitor the EOIR business process from start to finish and review system actions with full audit trail.