MSAR, Australia share tax information

Macau will soon sign a tax information exchange agreement with Australia, an extensive piece of work within the framework aimed at stopping tax evasion

Macau will take another step towards fighting tax evasion when it signs a tax information exchange agreement with Australia. This is the second agreement of its kind that the SAR Government implements following its recent agreement in April with seven European countries and territories.
To date, the government has signed agreements that link the territory to Denmark, including the autonomous territories of Faroe Islands and Greenland, Iceland, Norway, Finland and Sweden.
Macau’s Chief Executive yesterday gave the green light for the secretary for Economy and Finance, Francis Tam Pak Yuen, to sign the new deal with Australia. There is no date as yet for the signing ceremony.
The agreement will provide authorities on both sides with access to information about the capital dispositions and incomes of citizens with tax arrears and could reveal assets and earnings not declared at home.
The initiative is a continuation of an extensive piece of work within the framework aimed at stopping tax evasion, considering that the willingness of governments to share information is viewed as an important element in the enforcement of domestic tax laws.
This new agreement, according to Canberra, will outline the obligation between Australia and Macau “to help each other by exchanging correct tax information relevant to the administration and enforcement of their respective domestic tax laws [civil and criminal]”.
However information may only be provided on request and a jurisdiction is not obliged to provide information that has not been requested by its counterpart.
The tax information exchange agreement differs from a comprehensive tax treaty, as it does not contain any provisions concerning the allocation of taxing rights over income. Macau and Australia have not yet inked a double tax agreement.
Macau has moved to accept the Organisation for Economic Cooperation and Development’s exchange-of-information agreements for tax purposes two years ago. The law came into force in September 2009, after the London G20 summit on April 2, when countries agreed to define a blacklist for tax havens, to be segmented according to a four-tier system, based on compliance with an “internationally agreed tax standard”.
There were calls for Macau and Hong Kong to be included as tax havens separately from China on the list, but they were not based on a promise to enact tighter regulation.
Since the OECD meeting that almost had Macau labelled as a tax haven prior to Chinese government intervention, the SAR Government has made a significant effort to improve the transparency of the system to demonstrate its willingness to cooperate with its tax treaty partners in combating tax avoidance or evasion.