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Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Dominica 2016

Phase 2: Implementation of the Standard in Practice

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Published on November 04, 2016

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This report contains the 2014 “Phase 2: Implementation of the Standards in Practice” Global Forum review of Dominica.

The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by over 130 jurisdictions which participate in the work of the Global Forum on an equal footing.

The Global Forum is charged with in-depth monitoring and peer review of the implementation of the standards of transparency and exchange of information for tax purposes. These standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004, which has been incorporated in the UN Model Tax Convention.

The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party. “Fishing expeditions” are not authorised, but all foreseeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard.

All members of the Global Forum, as well as jurisdictions identified by the Global Forum as relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined – Phase 1 plus Phase 2 – reviews. The ultimate goal is to help jurisdictions to effectively implement the international standards of transparency and exchange of information for tax purposes.

Key Findings

The Phase 2 review of Dominica resulted in a rating of Partially Compliant with the international standard. Although Dominica’s legal framework ensures the availability of ownership and identity information with respect to most domestic and foreign entities and arrangements, Dominica is lacking in supervision and enforcement of such obligations. The report also identified significant deficiencies with respect to the availability of accounting information. Dominica is thus recommended to ensure that all entities and arrangements are required to retain accounting records, including underlying documentation, for at least five years and are subject to adequate oversight. The Phase 2 report further noted potential issues with the protection of confidential information exchanged under Dominica’s agreements. Dominica is recommended to ensure that EOI staff are sufficiently aware of exchange procedures and all legal provisions in place to protect sensitive information. For further information on Dominica’s legal and regulatory framework in the field of transparency and exchange of information and its implementation in practice please access the full report here.