Exchange of tax information: Privacy and Confidentiality concerns

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The main research question is whether taxpayers' personal data are adequately protected when exchanged between national tax authorities. Are taxpayers being given sufficient opportunities to participate in the EoI process? Do the confidentiality standards provided by various states to the information received protect taxpayers sufficiently? These questions are fundamental given that nowadays EoI is the leading policy response to combat tax avoidance and evasion. These two phenomena have risen to the very top of the international political agenda; this is partially due to the recent tax related data leaks which revealed that the world's wealthy elite continue to evade taxes, but also because of the great inequality that these phenomena have contributed to particularly as offshore tax evasion is highly concentrated among the rich. For these reasons, both the international and European community have focused on further promoting EoI. EoI is also based on technological developments, in the sense that it is due to technological applications that information about taxpayers is being collected, stored and exchanged and thus big data gradually become the tool used to create transparency. However, these developments were not accompanied by actions to protect taxpayers' personal data. Tax data are personal data and thus taxpayers should be granted some procedural rights, i.e the right to know about the exchange, have access to the data and be able to object to the exchange. Otherwise they will not be able to control whether the exchange takes place in line with the requirements provided by the law (e.g. is the information exchanged foreseeable relevant for the purpose of the exchange, or do they contain trade secrets etc.). Also, information being exchanged should be vested with some minimum confidentiality standards. If not, the data exchanged may be accessed by a large number of authorities, be published, and used for unauthorized purposes. They can also be leaked to the public because of lack of infrastructure, e.g. developing countries, or because of the predominance of other national aims which lead other national authorities to gain unauthorized access to this confidential information, e.g. US for reasons of national security. The problem is that none of the legal instruments regulating EoI provide for specific procedural rights or confidentiality standards but it is left to each state to decide individually the level of protection they consider appropriate. Thus, important differences can be found between states' national laws which may not only interfere with taxpayers' rights but they may also affect the effectiveness and efficiency of the exchange process as states may refuse to exchange data when they regard the level of protection offered by the other jurisdiction as inadequate. Tracing these differences will enable me understand the different ways in which states conceptualize the substantive right to privacy in tax cases (compared to non-tax ones).The first step, hence, is to compare some key states' national laws and practices with regard to procedural rights and confidentiality standards and try to draw some conclusions on whether they favor effectiveness or privacy. Main source of information will be the Reports published by the Global Forum of Transparency and Information Exchange and the focus will be on EU member states and some third countries with which the EU has signed agreements for exchange of information e.g. US, Switzerland, Monaco, San Marino, and Andorra. This is the first attempt to make use of the data gathered by the Global Forum, as well as the first attempt to see the development of Member States' national regimes and practices throughout the years and how they are affected by the international pressure to promote tax transparency. The second step will be to interrogate into the compatibility of these regimes with EU law, and more specifically with the right of defense and the right to ...