OECD peer review process: 5 steps to success

As transparency initiatives continue to grow, tax authorities must ensure they streamline their frameworks with global standards. Preparing for the OECD’s peer review process is key. 

The automatic exchange of information (AEOI) is the collective name for global tax transparency initiatives aimed at addressing offshore tax evasion. These measures ultimately seek to strengthen compliance and tax revenue collection. 

The Global Forum – a multilateral body leading the implementation of these requirements - monitors AEOI standards. The Forum guides countries through the peer review process, which assesses and rates how effectively countries have implemented the AEOI standard, providing recommendations for improvement. 

This process can be lengthy and complex. Here we look at five essential steps to help tax authorities improve their OECD peer review ratings: 

1. Robust AEOI compliance framework  

Tax authorities should ensure their compliance framework is well-documented, using an approach that is appropriately tailored for the jurisdiction's size, financial institution profile, and overall regulatory context. 

This includes having a phased plan with clear steps, such as a detailed compliance calendar, that allows the jurisdiction to follow realistic timeframes and meet OECD expectations. The authority should also engage in a mixture of compliance activities – such as self-certification and on-site reviews. 

A comprehensive AEOI compliance framework provides the necessary foundation to prepare for AEOI reviews and demonstrated effective implementation of CRS and FATCA obligations. 

2. Technology-driven processes 

Countries should leverage technology solutions to reduce manual effort, improve the accuracy of data, and increase the tax administrations’ responsiveness to requests. Consequently, this will reduce the cost of compliance for authorities. 

Automation provides immediate insights into missed reporting, the profile of reporting, and the quality of submitted data. This develops better data with minimal errors and can be analysed in several different ways. 

Having a strong technological foundation allows for increased responsiveness, meaning that jurisdictions can quickly identify and respond to the OECD and partner jurisdictions. 

3. Collaborative approach 

Tax authorities should also remember that the peer review process is ultimately collaborative. This requires working effectively with industry stakeholders, domestic regulatory partners, and partner jurisdictions to facilitate AEOI compliance. 

Having a streamlined communication strategy with reporting entities is mutually beneficial - the better the reporting the more it will help find the most common mistakes so authorities can easily avoid them. This can also raise areas of concern for stakeholders and allow the relevant authority to provide additional guidance. 

Some authorities have also formed steering groups or committees that include each involved organisation, spreading the responsibility and control of AEOI. 

4. Learn and develop 

While complying with these standards may seem a difficult, daunting experience for tax authorities, there are opportunities to learn and develop with every step. 

Authorities can familiarise themselves with how assessments work and how to ensure they meet the requirements, both externally and internally. Through these learnings, administrations can convert challenges into action plans that help to align requirements and targets. 

5. Stay prepared for change 

The OECD peer review process is ongoing and evolving – only becoming more stringent and complex with every iteration. The relevant procedures and statistics should be revisited regularly to ensure they are up to date. Tax authorities will need to make changes when standards are amended to stay compliant. 

Ensuring you have the right expertise and planning for the future are key parts of the peer review process. Administrations should seek to stay aligned with global initiatives to support the push towards transparency.