Minister for National Economy Mihály Varga, acting in the name of Hungary, has signed an agreement on the international sharing of tax-related information, which represents a milestone in the fight against tax evasion. The document was signed by ministers and high level representatives from almost 50 countries and authorities at the OECD Global Forum on Transparency and Exchange of Information for Tax Purposes in Berlin, Germany.

The signatories to the agreement, having recognised that action against tax evasion can only be effective if performed at a global level, have committed themselves to using a new, uniform global standard for the automatic sharing of information relating to tax, and are urging for the system to truly be proliferated globally.

The signatory states have undertaken to create the conditions for the automatic exchange of financial account information. As part of the so-called Early Adopters Group, Hungary has undertaken to create the conditions for the automatic sharing of tax-related information by 2017 and – with relation to a predetermined range of data – to complete its undertakings by 2018.

The agreement on the automatic exchange of financial account information is an efficient tool for the reduction of tax evasion and tax fraud that occurs within the international arena, and will also enable the simple disclosure of assets stored in foreign financial institutions.

According to the Agreement and the Common Reporting Standard, Hungarian financial institutions and tax authorities will be obliged to share information related to account-holder data and financial account details, respectively.

In view of the agreement, the Hungarian tax authority will forward information based on the tax reports submitted by institutions to the tax authorities of partner states, and will receive similar data in exchange, thus providing tax authorities with a tool that facilitates more efficient action against tax evasion through cooperation with a large number of partner countries, and which enables participant states to better enforce their own, internal tax regulations while respecting the rights of taxpayers.

In addition to agreeing to exchange financial account information, the Early Adopters Group also issued a joint statement called the “Berlin Declaration on transparency and fairness in tax matters“.

(Ministry for National Economy)