Automatic exchange of information

Also called: AEOI, Common Reporting Standard · Topic: Taxation: Direct and Indirect Taxes, GST and Global Tax Issues · NCERT: Beyond NCERT

Meaning

Automatic exchange of information (AEOI) means countries regularly share financial-account data about each other's residents, without being asked each time. Banks report account holders, balances and income. This makes it harder to hide money in foreign accounts. The main global standard is the OECD Common Reporting Standard (CRS).

Example

India made its first CRS exchange in 2017. Under its FATCA agreement with the US (2015), India also swaps account data with the US every year. So an Indian resident's undeclared account abroad can reach Indian tax officials.

Don't confuse with

• Double Taxation Avoidance Agreement: decides which country may tax a given income. AEOI only shares data to catch evasion.

Related concepts

• Tax haven
• Transfer pricing
• Double Taxation Avoidance Agreement
• Retrospective taxation
• Base Erosion and Profit Shifting
• Significant economic presence
• Equalisation levy
• Pillar One
• Global minimum tax

Read more

• International taxation: treaties, profit shifting and the global minimum tax