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Crackdown on tax evasion – improving ways of coordination between the tax authorities and automatic exchange of information developments in Romania

Ioniță Claudiu (), Ibadula Birol (), Vlad Cristina () and Petre Brezeanu ()
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Ioniță Claudiu: The Bucharest University of Economic Studies, Bucharest, Romania
Ibadula Birol: The Bucharest University of Economic Studies, Bucharest, Romania
Vlad Cristina: The Bucharest University of Economic Studies, Bucharest, Romania

Proceedings of the International Conference on Business Excellence, 2017, vol. 11, issue 1, 523-531

Abstract: In an effort to reduce the tax transparency and banking secrecy, the Organisation for Economic Co-operation and Development (“OECD”) has been taking the lead on the battle against cross-border tax evasion, seconded by the Internal Revenue Services (“IRS”) of the United States of America (“USA”), the G20 and the European Commission. Understanding the power that is brought by information and knowledge, the international community proposed adapting the exchange of information tools that were available to them and extending them to a worldwide level. As a result, the Common Reporting Standard (“CRS”) and the Foreign Account Tax Compliance Act (“FATCA”) reporting standards were born. This paper aims at analyzing the improvements in automatic exchange of information brought by the CRS and FATCA standards, together with its limitations. An important section of this paper shall be dedicated to the role that Romania plays in the international efforts of fighting tax evasion, together with the tools and procedures developed in order to sustain the reporting standards. In order to analyze the effects of the CRS and FATCA, it is essential to understand the pros and the cons of the international cooperation on tax matters and its available tools before the CRS and FATCA were created. As there is limited previous literature on the subject, the methodology of the research will consist mainly of analyzing the guidelines issued by the international public body representatives and of the current legislative framework. The main finding of the paper can be considered the fact that the new developments in the automatic exchange of information field can represent a huge step forward towards limiting the tax evasion activity, however, one should be reserved due to aspects such as compliance costs, protection of private information, data gathering and processing techniques and tax residency uncertainty. Further analysis is required when the automatic exchange of information results will be available in order to update the reservations of the paper.

Keywords: automatic exchange of information; CRS; FATCA; tax evasion; Romania; OECD (search for similar items in EconPapers)
Date: 2017
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DOI: 10.1515/picbe-2017-0056

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