Navigating the evolving landscape of international tax transparency

The digital age has transformed the global economy, making cross-border transactions common and facilitated the rapid expansion of cross‑border information sharing between tax authorities. Exchange of information (EOI) – comprising automatic, spontaneous and on‑request – is a central feature of this global tax transparent environment.

As transparency standards strengthen, taxpayers must recognise information supplied to one tax authority is increasingly likely to be shared widely. For example, in 2024 Irish Revenue automatically exchanged financial account information with 116 jurisdictions. The scope of information shared is continually expanding for example, crypto assets are now included. Furthermore, certain information is becoming public, through public country by country reporting.

This large volume of information can easily be leveraged by tax authorities as they utilise technology, including data analytics and AI tools, by which cross‑border data from multiple sources is ingested and reconciled at scale to flag anomalies, generate risk scores and prompt swift, targeted enquiries or assessments.

Given that most EOI is routine and automatic, this article focuses on EOI on request, which is specifically used when tax authorities have identified an issue which they are investigating and are triangulating information to substantiate it.  

EOI on request is a powerful tool at the disposal of tax authorities. It provides for obtaining information, but it also can result in the extension of the statute of limitations for tax audits and reassessments in certain jurisdictions, such as France. In 2024 alone, Revenue dealt with over 2,800 requests. Accordingly, any EOI request should be treated as a red flag, escalated to management and carefully reviewed.

The information sought may already be in the possession of the requested authority. If the domestic authority does not hold it, it may need to obtain it from the taxpayer. In those circumstances, there may be an opportunity for taxpayers to contest the request, or alternatively volunteer additional information to put it in the right context.