The Multilateral Convention on Mutual Administrative Assistance in Tax Matters has been amended to provide for a global network which deters tax evasion.
Malta has yet to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. The Convention, originally developed by the Council of Europe and the OECD in 1988, has been recently transformed into a wide-ranging agreement to prevent evasive financial structures and particularly combatting the use of offshore tax havens. The June 2011 amendments were in fact a response to the G20’s desire for a more cooperative tax environment and have far-reaching implications on tax administrations.
The Convention has been open to all states and incorporates international information exchange standards for tax purposes. State signatories to the Convention are to assist each other in the collection of tax and the service of documents, extending the cooperation to joint audits and investigations and routine sharing of information. The amendments make the Convention the widest-ranging taxation agreement globally.
Pursuant to the recent amendments, states are implicitly obliged to sign the Convention to avoid being labelled as jurisdictions which allow tax evasion and money-laundering. This also has implications for account holders in non-signatory states as their accounts would be deemed to be suspicious. The initiative, driven by the US and the UK, aims to provide a large transparent financial playing-field, in the process making it unfavourable for states not to sign up to the Convention.
