Automatıc Exchange Of Informatıon

Ankalex Logo EN-2

OECD has been making great efforts to improve co-operation between tax and law enforcement agencies against harmful tax regimes, tax heavens and double taxation (and non-taxation). As known, the OECD makes reports and offers solutions, especially on the prevention of harmful tax competition and tax havens. One of the important solution is information exchange. In this article, automatic exchange of information is examined.In international tax law, double taxation and double non-taxation problems are one of the most important issues. To reach an agreement on taxation and non-taxation issues among countries is not simple since taxation is directly related to the sovereignty. Nevertheless, excellent steps have been taken in these areas such as Avoidance of Double Taxation Treaty (“the Treaty”) and especially efforts of OECD have been extremely effective in the development of international tax law.

Even though there are lots of helpful precautions, having merely double taxation treaties is not efficient to overcome tax evasion problems. Nowadays, movement of capital is extremely dynamic and for that reasons cooperation of tax administrations is essential.  At this point, the importance of information exchange among the tax administrations emerges. Well, what is the information exchange and what is the legal framework of automatic exchange of information?

What is the information exchange?

The Multilateral Convention on Mutual Administrative Assistance in Tax Matters (“the Convention”) is signed by over 130 countries. The Convention has the potential to become the leading global instrument for tax co-operation around the world.

The Republic of Turkey has signed the Convention in 2011. However, to come into force of the Convention in Turkish law took a little longer compared to other countries. The Convention entered into force as of 07.01.2018.

Under the Convention, the Parties shall exchange any information regarding to their domestic laws concerning the taxes covered by the Convention. At the request of the applicant State, the requested State shall provide the applicant State with any information referred to in Article 4 of the Convention. This is named “Exchange of information on request”.

Under the 6th article of the Convention, the Parties can perform “automatic information exchange” with the methods they will determine by making an agreement.

What taxes are included in the scope of the Convention? In which cases it is necessary to exchange information without request?

Scope of the Convention and Automatic Information Exchange

Taxes subjected to the Convention is set forth in the 2nd article of the Convention:

-taxes on income or profits,

-taxes on capital gains,

-taxes on net wealth,

-taxes on income, profits, capital gains or net wealth which are imposed on behalf of political subdivisions or local authorities of a Party,

-compulsory social security contributions,

-estate, inheritance, or gift taxes,

-taxes on immovable property,

-value added or sales taxes,

-specific taxes on goods and services such as excise taxes,

-taxes on the use or ownership of motor vehicles,

-taxes on the use ownership of movable property other than motor vehicles.

There is specific article for non-requested exchange information.  It is named “spontaneous exchange of information”. According to the 7th article of the Convention,

-the first-mentioned Party has grounds for supposing that there may be a loss of tax in the other Party;

-a person liable to tax obtains a reduction in or a exemption from tax in the first-mentioned Party which would give rise to an increase in tax or to liability to tax in the other Party;

-business dealings between a person liable to tax in a Party and a person liable to tax in another Party are conducted through one or more countries in such a way that a saving in tax may result in one or the other Party or in both;

-a Party has grounds for supposing that a saving of tax may result from artificial transfers of profits within groups of enterprises;

-information forwarded to the first-mentioned Party by the other Party has enabled information to be obtained which may be relevant in assessing liability to tax in the latter Party.

Similarly, Turkish Revenue Administration and tax inspectors are endowed with authority to collect information under the Turkish Tax Procedure Law.

Assistance in Recovery and Simultaneous Tax Examinations

At the request of one of the Parties, two or more Parties shall consult together for the purposes of determining cases and procedures for simultaneous tax examinations.

At the request of the competent authority of the applicant State, the competent authority of the requested State may allow representatives of the competent authority of the applicant State to be present at the appropriate part of a tax examination in the requested State.

When it comes to the assistance in recovery, with a request by the applicant, the requested State shall take the necessary steps to recover tax claims of the first-mentioned State as if they were its own tax claims.


There is just an article under the Turkish Tax Procedural Law. There is no specific legal regulation about information exchange in Turkish Tax Regime. According to the report from Turkish Revenue Administration, Turkey exchanges information with 54 countries regarding taxes.