The exchange of information on request (EOIR) is a globally recognised standard that allows tax authorities to request taxpayer information from another authority in connection with an investigation.
This initiative seeks to improve tax transparency by tackling offshore tax evasion and encouraging compliance. In the last 10 years, over 250,000 requests for information have been sent, enabling the global collection of more than €7.5 billion in additional tax revenue.
Complex EOIR processes can be laborious and time-consuming. In a fast-paced world, with increasing volumes of data, manual processes are no longer viable. Having robust, flexible, and scalable technology is as important as fully understanding the regulations.
1. Supporting the peer review process
The right system allows for full traceability of all requests, including reports providing statistics on the number of requests received, the type of information requested, the number of active exchange partners and the time taken to answer each request.
Collecting and analysing this information can help authorities find out where resources are most needed and highlight best practices in complying with EOIR.
Technology also supports the OECD‘s EOIR peer review process and provides a wide range of statistical and operational reports. A software solution allows tax authorities to:
- Track incoming reports and assignees
- Monitor all stages of the requests received
- Know when to follow up with your outgoing requests
- And see accurate statistics on EOIR
There is also a special focus on element C5 – Quality and Timeliness of responses. The majority of tax authorities struggle to adhere to the 90-day standard for information or update. This leads to poor compliance ratings and a damaged reputation.
2. Protecting sensitive data
When handling huge amounts of data, tax authorities must seek to protect this sensitive information. As well as introducing best security practices for employees, administrations should have the technology that supports their information security strategy. Manual handling of requests is subject to human errors and data corruption, and it´s no longer viable.
With cyber threats and breaches continuing to rise, countries must seek to minimise reputational and financial damages from harmful actors. They must restrict access to data and incorporate a full audit trail of user actions to ensure they adhere to confidentiality obligations.
The right solution complies with all OECD guidance for the protection of confidentiality of EOI records. This means keeping all data on secure, firewalled servers and in an encrypted database, automatically encrypting data sent to or received from the CTS and carrying out regular independent penetration testing to address evolving data security threats prior to release to customers.
3. Quality & Speed
With better technology infrastructure, tax administrations can expect to improve the quality of reports as well as the speed of responses. A solution can send automatic alerts and escalations to ensure the timely processing of requests.
Authorities should have configurable workflow milestones and checklists to allow the EOIR business process to be easily automated and monitored. This allows tasks to have a comprehensive system audit trail, which tracks user action, time of action and user identity.
Additionally, EOIR software allows for notes to be entered for each milestone in the workflow to capture key decisions or relevant information. This delivers a transparent audit trail of actions and decisions for any future reviews.
While most tax authorities struggle with financial resources, a technology solution can be cost-effective as it reduces the time spent on EOIR and mistakes from manual processing.
Access to automated recording, tracking, and processing of EOI requests in a fully auditable and secure online solution helps EOI teams to focus on gathering and analysing the requested data. By focusing resources where are most needed, tax authorities are acting proactively, making better decisions and improving overall collaboration with the industry.
5. Preparing for the future
Tax administrations must predict and prepare for the next steps. Countries will soon adopt data collection and transfer, meaning authorities must be able to interpret tax data quickly.
Systems will need to handle data matching, sorting, visualising, and analysing to get a better insight into taxpayer behaviour. This will allow authorities to get a snapshot of company filings and a more immediate view of information.
Authorities must introduce future-proof, reliable, and scalable technology systems to ensure they collect and validate data without service interruptions and can be tailored to comply with changing requirements. Investing in the right technology now will prepare countries for the future.
How can we help with your EOIR commitment?
We offer a tailored solution to meet EOIR, AEOI and other compliance requirements. Our team works to ensure tax authorities have the right technology infrastructure and comply with all regulations. Our software provides automation of all processes associated with the collection, validation, cross-border exchange and analysis of information.
With the fast implementation and proven low-risk process, we will ensure a smooth transition to the new system. You will have guidance through every step of the process. With the help of our subject matter experts and specialised teams, you will be empowered to do your job better. As part of the global community of tax authorities, you will learn and share your experience with your peers through webinars, panel discussions and product workshops.
Request a demo to learn more.