Twelve no or only nominal tax jurisdictions have begun their first tax information exchanges under the Forum on Harmful Tax Practice’s (FHTP) global standard on substantial activities.

The standard ensures that mobile business income can no longer be parked in a low tax jurisdiction without the core business functions being carried out from that jurisdiction and that the countries where the parent entities and beneficial owners are tax resident get access through regular exchanges of information.

The jurisdictions are Anguilla, the Bahamas, Bahrain, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey, Turks and Caicos Islands and the United Arab Emirates.

These new annual exchanges provide key data on the substance and activities of entities in no or only nominal tax jurisdictions to the jurisdictions in which the immediate and ultimate parent and the beneficial owners of the entities are resident. The exchanges will enable receiving tax administrations to carry out risk assessments and to apply their controlled foreign company, transfer pricing and other anti-base erosion and profit shifting provisions.