In July, the Organization for Economic Cooperation and Development (OECD) added Montenegro to the list of jurisdictions (states and territories) that do not meet tax transparency standards because it has not started automatically exchanging information between tax authorities in an effort to reduce tax evasion (AEOI), which was required to be done by the end of 2023.
This was stated in the regular report of the OECD, which was addressed to the ministers and governors of central banks from the G20 group, and which "Vijesti" has access to.
AEOI refers to the automatic exchange of information between international tax authorities in an effort to reduce global tax evasion and increase tax transparency. This includes information relating to financial accounts, crypto asset data, tax rulings, cross-border arrangements and the like, of individuals and businesses
The OECD developed the AEOI standard in 2014.
In October 2019, Montenegro signed a protocol on accession to the Multilateral Convention on Mutual Administrative Assistance in the Tax System (MCAA) with the Organization for Economic Cooperation and Development (OECD), which entered into force on May 1, 2020, and which clearly expressed the need for the improvement of international cooperation, which implies the establishment of an information exchange system, including automatic information exchange.
“To promote a level playing field with respect to tax transparency standards, the G20 has requested regular reports from the OECD on jurisdictions that do not meet tax transparency standards. The most recent update in this regard was provided in July 2022, when four jurisdictions were deemed to have failed to comply with tax transparency standards. Although significant progress has been made, three jurisdictions (Anguilla, Niue and Sint Maarten) are successfully implementing the necessary measures and are being removed from the list, two new jurisdictions (Jordan and Montenegro) have now been added to the list as they have not fulfilled their obligation to initiate AEOI exchanges by end of 2023. Accordingly, the current list of jurisdictions deemed to have not satisfactorily applied tax transparency standards includes three jurisdictions: Jordan, Montenegro and Trinidad and Tobago. The Global Forum remains actively engaged with these jurisdictions, including through capacity building, technical assistance and guidance to facilitate their progress towards full compliance,” the report said.
"Vijesti" is waiting for answers from the Tax Administration, which it manages Sava Laketic to the questions - why Montenegro has not started AEOI data exchange, what specifically has not been done to apply these standards of tax transparency and when the PU expects to fulfill everything it needs to start applying AEOI.
In February 2023, the government adopted the Information on the need to provide budget funds for the acquisition, implementation and maintenance of the "automatic exchange of information-aeoi" information system in order to provide international administrative assistance in the area of the tax system. It is about the sum of 300.000 euros.
"The tangible benefits of international tax transparency are evident - more than €130 billion in additional revenue (taxes, interest, penalties) has been identified since 2009 thanks to information sharing, including voluntary disclosure programs, similar initiatives and offshore tax investigations," said the OECD, which indicates that taxes represent the largest (and most stable) source of income for development.
The report stated that the exchange of information through the AEOI standard when it comes to developing countries represents a great potential for increasing domestic revenues and for combating tax evasion.
"Developing countries collected close to 80 percent of additional income through information exchange last year. Increased commitment to AEOI by developing jurisdictions demonstrates the effectiveness of capacity-building and outreach efforts in AEOI Countering Illicit Financial Flows (IFF) is critical for developing jurisdictions, which are disproportionately affected by the problem. AEOI is a powerful tool in this fight, promoting tax transparency, increasing revenue collection and encouraging fairer tax systems. In 2023, AEOI continues to be a powerful instrument for tax transparency. Activity within the AEOI remained high during 2023, with data exchanged on over 134 million financial accounts, representing almost €12 trillion in total assets. This represents a huge amount of information that allows jurisdictions to compare the data obtained with their own databases and investigate tax evasion abroad," the OECD said.
The report indicated that the protection of confidentiality and the proper storage of sensitive information exchanged are of key importance to the AEOI standard.
“The Global Forum therefore continues to implement a confidentiality and data protection assessment program to ensure that participating tax administrations adequately protect the data exchanged. Most post-exchange estimates for jurisdictions that started exchanges in 2017-2018. was completed in 2025, while the remaining will be completed by 2025. In light of the rapid development of technology and security environments, the Global Forum is developing an improved methodology for continuous assessments from XNUMX, including a new mechanism to monitor the ongoing implementation of key information security measures in jurisdictions. The results of these assessments have not been published due to their confidential nature," the report states.
Crypto asset reporting group formed
The Report also indicated that one of the challenges is dealing with the risks posed by crypto-assets, and that the Crypto-asset Reporting Framework (CARF) was created for this purpose.
"Following the G20 Leaders' Declaration in September 2023, the Global Forum formed the CARF Group. This group, open to all interested members (currently with 49 participating jurisdictions, including the European Union), aims to ensure the widespread implementation of CARF. Discussions within the CARF group are already underway, with a focus on fulfilling the Global Forum's commitments to CARF by the 2024 Plenary Session. This includes identifying relevant jurisdictions and establishing a coordinated timeline, with a significant number of jurisdictions planning to begin sharing information under CARF by 2027. In addition, the CARF group is working to provide guidance and tools for jurisdictions implementing CARF,” the report said.
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