Data leaks and CRS reporting

The OECD's commentary on section 5 of the Common Reporting Standard ('CRS') boasts that 'confidentiality of taxpayer information has always been a fundamental cornerstone of tax systems' and that 'the ability to protect the confidentiality of tax information is also the result of a “culture of care” within a tax administration'.

With this in mind, it would be interesting to see how the OECD might comment on past data protection scandals – such as the online publication of every Italian's declared earnings and tax contributions in 2008 (see article here). Perhaps more worrying is the letter sent yesterday by Yahoo! to the office of the US Director of National Intelligence, in which it would appear that the US government is continuing to use anti-terror legislation to collect vast amount of data, and the web company is challenging government orders for Yahoo!s data.   

There is a direct link between the CRS and the approach adopted by governments in the fight against terrorism, in that they are both indicative of a disproportionate invasion of the right to privacy to pursue a legitimate interest.

As is well known, the European Court of Justice has already considered the issue in the so-called Facebook case, in which the EU's highest court held that 'legislation permitting the public authorities to have access on a generalised basis to the content of electronic communications must be regarded as compromising the essence of the fundamental right to respect for private life'.

In light of the OECD's approach to the issue of confidentiality under the CRS, a judicial review of the new rules appears inevitable.

To read the previous article, please click here.

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