OECD Approves Updated Commentary on Tax Information Exchange

On February 19, 2024, the Council of the OECD approved an updated version of the commentary on Article 26 (Exchange of Information) of the OECD Model Tax Convention. A number of technical changes were made to facilitate international tax cooperation and information exchange.

The updates align with the provisions of the Guidance on the Implementation of Confidentiality in the Convention on Mutual Administrative Assistance in Tax Matters and in Article 26 of the OECD Model Tax Convention, including the Commentary from February 8, 2021, with similar changes in the Convention.

In particular, the update clarifies that information obtained through administrative assistance may be used for tax purposes concerning persons other than those originally requested (to the extent that such information is relevant to the tax case involving that specific taxpayer). Procedures and conditions for the exchange of information not related to specific taxpayers, including statistical data or analytical information that may be disclosed to third parties, are also established.

In this context, the OECD’s document from the previous year, addressing the benefits, conditions, and challenges of using exchanged information under double taxation avoidance agreements for non-tax purposes, including combating illegal financial flows, is also of interest. The document proposes possible approaches to optimizing and facilitating this cooperation, based on the experience of the Latin American initiative. This is a relevant topic for discussions on mechanisms for detecting violations.

Update to the commentary you can find on this link.

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