Monica Bhatia

Monica Bhatia is a new entry this year Monica Bhatia was also in the Global Tax 50 2016, 2015, 2014, 2013, 2012 and 2011

Having led the secretariat of OECD's Global Forum on Transparency and Exchange of Information for Tax Purposes for almost six years, Bhatia tells International Tax Review that 2017 is the year in which the efforts of the past six years came to fruition.

"Once again, I am happy that the work the Global Forum is doing is recognised and put forward. So, I'm glad that the world is seeing what the Global Forum is doing and it's been an amazing year for big changes," Bhatia says. "Every year seems really important, but certainly 2017 is really important."

In 2017, almost 50 countries commenced the automatic exchange of tax information (AEOI) under the common reporting standard (CRS), with another 50 coming on board in 2018. An increasing number of developing countries also benefited by receiving support to improve their tax policies and align themselves with the international tax standard. The membership of the Global Forum also grew to 147 members as of December 2017, with more and more developing countries joining throughout the year.

Further, the Global Forum helped 14 countries to adapt their tax systems to avoid inclusion in the OECD's list of uncooperative tax jurisdictions in the wake of the Panama Papers. "You will recollect last year that we had the Panama Papers and then the G20 said we had to prepare a list, and then the OECD prepared some criteria, and jurisdictions had almost a year to do something so that they didn't end up on the list. The amazing thing was that we devised a special procedure to allow the jurisdictions to come and show that they have actually made changes and in that procedure as many as 14 countries and jurisdictions came forward and were able to demonstrate that they had made the changes, which was remarkable because they had made changes in a very short period of time, and this included countries like Panama, Costa Rica, and the Dominican Republic."

The efforts made by the Global Forum to encourage countries to adapt to the international standard is reflected in the OECD's blacklist, which now only contains one country (Trinidad and Tobago).

"With Trinidad and Tobago, we are now in constant contact with them, trying to help and support them. The difficulty in Trinidad and Tobago, however, is the lack of political will to make the changes, and that's why they have ended up on both the EU blacklist and the OECD/G20 list. And that's not from a want of trying from our end, it's just a lack of political will on their part."

The hope next year is to have all countries be tax compliant and have none on the OECD tax blacklist, but Bhatia says it's not quite that simple as that because the compliancy criteria from the OECD/G20 could evolve.

Looking ahead to the coming year, Bhatia believes beneficial ownership rules will be a key point in discussions. In 2017, the Global Forum published the results of a round of peer reviews launched in mid-2016 that included a new focus on the availability of and access by tax authorities to beneficial ownership information of all legal entities and arrangements, in line with the Financial Action Task Force international standard. "Beneficial ownership is going to be the huge focus going forward," Bhatia says. Although some countries reviewed are not doing so well on the beneficial ownership standards, Bhatia says the Global Forum is working with those countries to help them improve. "The next two or three years will see a lot of focus on helping those countries make sure they get it right on beneficial ownership".

One of the biggest challenges coming up for Bhatia and her team is to ensure the countries committed to commencing the AEOI in 2018 deliver on their commitments to carry out exchanges from September 2018.

"I think we have made tremendous progress in the last four or five years and the momentum is there and, over the next year, with 50 more countries coming around to AEOI, and more and more countries amending their laws and putting in place transparency measures, I think this will grow. This is an unstoppable move."

Bhatia believes that countries outside the CRS network will start to see the gains of the AEOI and want to join too. "Things have changed, and going forward there are more and more countries coming together and a lot of attention needs to be paid as to how this [exchanged] information is to be exploited or how this infrastructure is to be used – and that is really a focusing point. And that will bring about the gain [of joining this network for countries]."

Another ongoing challenge is addressing the needs of the Global Forum membership, which Bhatia says is growing at a fast pace. The technical assistance unit has been established to deliver on the needs of these new members, with Bhatia expecting more members to join. "We had 10 new members this year and by their very nature these new members are developing countries, they are lower income countries," she says.

"To be able to bring them up to the par for global standards, as well as to ensure they benefit from all this, a lot of intense work is required – and part of this we saw in Togo: our teams were there talking to political leaders and administration staff, and providing technical assistance, which is very resource intensive. We just don't want new countries joining, then failing the peer review process and then wondering why they are a part of this."

After an eventful 2017 that witnessed big changes in the way governments communicate and exchange tax data, 2018 holds more opportunities for the Global Forum to expand and create a fairer, more transparent tax environment.