IEIM200200 - Legal framework for exchange: What we can use the information for –taxes covered

You can only use information obtained under an international agreement for the purposes provided in that specific agreement. As explained in IEIM200100, the primary purpose will be linked to administration, assessment, and enforcement of tax.

In some agreements, the information can also only be used in relation to the specific taxes covered. In others, although the exchange must be in respect of specific taxes, once an authority has that information it can be used in administration, assessment, or enforcement of taxes of every kind and description –and in some few this will also include duties.

Where the agreement does allow for use in multiple taxes, there is no need to seek the permission of the other jurisdiction in order to do so, unless the information is being passed on to another agency (such as a local authority), provided the information is being used for the purpose outlined in the agreement in the administration and enforcement of tax. It may, however, be relevant to tell them, if you think there could be a tax impact of a similar kind in their jurisdiction.

See IEIM210310 for guidance on how, under the OECD Multilateral Convention on Tax, use for other taxes interacts with the taxes for which information can be exchanged and the reservations made by each jurisdiction.

(This content has been withheld because of exemptions in the Freedom of Information Act 2000)

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Example

In the course of an income tax enquiry, an officer has requested and received information from Jurisdiction X on a customer. Reviewing it, they can see that the information would be relevant to the customer’s VAT position. In order to use it in this they would need to check that the agreement with Jurisdiction X under which the information was received allowed for use in VAT.