Information about taxpayer activity is vital for tax administrations. It can mean the difference between assessing taxes fairly and equitably or potentially delegitimizing an entire tax system. If authorities cannot obtain information about certain taxpayers who use secrecy to evade taxes, others in the same jurisdiction may question the logic of continuing to comply with local tax laws. The process of searching for and gathering data should be agnostic (a) to the identity of the taxpayer being investigated and (b) to the likelihood that they are hiding assets or income and could therefore be assessed for millions, if not billions, in unpaid taxes. That said, tax administrations – particularly those in developing countries – have limited budgets and personnel. It is therefore reasonable for them to prioritize “leads” that could yield significant tax collections and corresponding penalties.
With the U.S. Foreign Account Tax Compliance Act (FATCA) of 2010 and the OECD Common Reporting Standard (CRS) of 2014, both developed and developing countries have addressed numerous blind spots in the pursuit of taxpayer data. Today, more than 170 jurisdictions participate in the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes, a joint initiative that has – according to the Organization – identified more than EUR 130 billion of “additional revenues (tax, interest, penalties)” since 2009, due to “voluntary disclosure programmes and similar initiatives and offshore tax investigations, including about EUR 45 billion by developing countries”. The Global Forum has since November 2024 expanded its mandate to pursue the global implementation of what they call the Crypto-Asset Reporting Framework (CARF), “a dedicated global tax transparency framework which provides for the automatic exchange of tax information on transactions in Crypto-Assets in a standardised manner with the jurisdictions of residence of taxpayers on an annual basis”.
Most Latin American countries are members of the Global Forum, allowing them to both benefit from and contribute to its information exchange platform. Additionally, many Latin American countries have signed Tax Information Exchange Agreements (TIEAs) or bilateral tax treaties with regional peers, granting them access to data held by their treaty partners upon request. Policy debates surrounding information exchange include (1) the limits on obtaining such information domestically, (2) whether all information acquired by one country’s tax authority should be shared with its counterparts abroad, (3) the extent to which data exchanged between tax administrations should be made publicly available (for instance, whether there are circumstances in which disclosing information about tax evaders to the public is justified), and (4) whether strategic considerations might lead countries to withhold certain information about their local taxpayers.
Here is a list of five articles from LatAm journals in our curated section that address this subject. We encourage you to write an article of your own about this topic and read/cite/critique the references below:
🇦🇷 La revolución material y la necesidad de asistencia remota para el procesamiento de datos a los fines de control y transparencia del sistema internacional tributario. – El caso argentino –
🇧🇷 O Intercâmbio de Informações para Fins Tributários entre Brasil e Estados Unidos da América frente ao Entendimento do Supremo Tribunal Federal acerca do Sigilo de Dados
🇨🇱 Norma Local de Secreto Bancario para Fines Tributarios, en Relación a los Estándares Internacionales Definidos por la OCDE
🇧🇴 El intercambio de información de las administraciones aduaneras en los países de la comunidad andina
🇪🇨 El intercambio de información fiscal y la protección al contribuyente
¹ “The size of staff in tax administration is […] significantly associated with tax collections, up to a point. [T]ax performance could improve with increasing size of staff in tax agencies, but there is an optimal size beyond which this effect is no longer present. […] [O]ur findings suggest that [emerging markets] and [low-income developing countries] have not passed this threshold and additional staffing is likely to be associated with higher tax collection.” See CHANG, Eui Soon; GAVIN, Elizabeth; GUEORGUIEV, Nikolay; and HONDA, Jiro. Raising Tax Revenue: How to Get More from Tax Administrations? IMF Working Paper WP/20/142. Published on July 24, 2020.
² See OECD. 15 Years: Promoting Transparency and Cooperation – 2024 Global Forum Annual Report. Paris: OECD, 2024, p. 4.
³ Id., p. 5.
⁴ See OECD. International Standards for Automatic Exchange of Information in Tax Matters: Crypto-Asset Reporting Framework and 2023 update to the Common Reporting Standard. Paris: OECD, 2023, p. 8.
