A Solution Perspective

An Open Source Collaborative and Foundational Solution Targeted at Non-OECD Member Countries

February 9, 2016

SOLUTION CONCEPT

INFORMATION ACCESS IMPLICATIONS

ADDRESSING KEY CBCR REQUIREMENTS

KEY CAPABILITIES DISCUSSION

DATA SECURITY

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EXAMPLE INFORMATION FLOW

CONTEXT

FUNCTIONALTY & ADAPTATION

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Context

Global Forum Roadmap Findings

Common Transmission System Tender

Multilateral Competent Authority Agreement

BEPS Action 13 & Guidance

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Action 13 Requires Confidentiality

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IT & Staff Challenges

Roadmap Item #1

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MCAA Relies Upon Questionnaire

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CTS Focuses on Transmission

SOLUTION CONCEPT

INFORMATION ACCESS IMPLICATIONS

ADDRESSING KEY CBCR REQUIREMENTS

KEY CAPABILITIES DISCUSSION

DATA SECURITY

8

EXAMPLE INFORMATION FLOW

CONTEXT

FUNCTIONALTY & ADAPTATION

Solution Concept

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CTS

TIE

TIE

TIE

TIE

TIE

TIE

TIE

An App to TIE it all Together

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TIE - Tax Information Exchange Application

Concept is to create an Application to be used for Inter-Governmental Tax Information Exchange • Like a phone handset for a telephone network – point to

point̶? Specific for tax information exchange (TIE)̶? Relies upon and Enhances OECD Common Transmission

System̶? Focused on CbCR information exchange, yet designed to be

adapted to handle many types of information

Secure, Simple, Standardized

SOLUTION CONCEPT

INFORMATION ACCESS IMPLICATIONS

ADDRESSING KEY CBCR REQUIREMENTS

KEY CAPABILITIES DISCUSSION

DATA SECURITY

11

EXAMPLE INFORMATION FLOW

CONTEXT

FUNCTIONALTY & ADAPTATION

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Addressing Key CbCR Requirements

• Brings simplicity through a high degree of standardization and minimization of technical complexities

• Reduces red tape through unified governance and controls– Simple to implement, simple and secure in use – Enables developing economies to demonstrate compliance with

technical aspects of MCAA/Treaty privacy requirements• Future Proof – designed to be adapted to address other needs• Supports effective use by end users

– Integrates training on both the system and the information contained therein; definitions of CbCR data elements as disclosed

High Degree of Alignment with Tax Authority Needs

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Addressing Key CbCR Requirements

• Provides security for data once received that matches or exceeds the data security standards referred to in the OECD implementation package and will be dynamic, addressing new security threats as these emerge– Provides confidence essential to building trust

• Promotes a platform upon which Tax Authorities may choose to provide transparency to taxpayers (ie: your data has been received by XXXX country type notifications)

• Enables consistency of understanding across jurisdictions with respect to data as disclosed and described by taxpayer

Benefits for Multinational Corporate Taxpayers

SOLUTION CONCEPT

INFORMATION ACCESS IMPLICATIONS

ADDRESSING KEY CBCR REQUIREMENTS

KEY CAPABILITIES DISCUSSION

DATA SECURITY

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EXAMPLE INFORMATION FLOW

CONTEXT

FUNCTIONALTY & ADAPTATION

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Data Security Details

Strong security and access control for received information • Industry standard approach to information security

management (ISO/IEC27000 technical standards)• Data encryption at all layers of technology; storage,

transmission, access• Strong Tax Authority and end user registration and

authentication features• Validation of counterparty right to receive information prior to

transmission (access control lists)• User specific limitations and logging of all actions around data

access, print, download, view, etc.

SOLUTION CONCEPT

INFORMATION ACCESS IMPLICATIONS

ADDRESSING KEY CBCR REQUIREMENTS

KEY CAPABILITIES DISCUSSION

DATA SECURITY

16

EXAMPLE INFORMATION FLOW

CONTEXT

FUNCTIONALTY & ADAPTATION

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Information Access Implications

Welcome to the TIE Application

Receive Information->26 New Items

Send Information->Create Exchange->View Status of Exchanges->Cancel Exchange

Melanie Smith

Training Support Reports Administer

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Initial Scope – CbCR Starting Point

• Supports exchange of country-by-country information per OECD spec (no country extensions in first phase)

• Enables automatic exchange (one-to-many) & exchange upon request (one-to-one)

• Support Common Transmission System based messaging

CbCR Exchange of Information provides the high value yet reasonably limited technical scope needed for success

SOLUTION CONCEPT

INFORMATION ACCESS IMPLICATIONS

ADDRESSING KEY CBCR REQUIREMENTS

FUNCTIONALITY & ADAPTATION

KEY CAPABILITIES DISCUSSION

DATA SECURITY

EXAMPLE INFORMATION FLOW

CONTEXT

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TIE Simplifies Access to CTS Functionality

Organization Registration &

ID Management

Outbound TransmissionManagement

End UserRegistration &

Access Management

Inbound Transmission Management

Message Storage & Encryption

System & Network Event Management

TIE Relies on Common Transmission System (CTS) for Message Transmission• Provides easy way to access CTS functionality• Enables regional approaches

CounterpartyValidation

Management

End User Localized Training

Includes the following capabilities:

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TIE Initial Functionality CbCR Focused

Support Country-by-Country Report Management• Basic features

Manage Reportable

Jurisdictions

Manage Contacts of Reportable Jurisdiction

Manage Reporting

MultinationalCorporation

Accept MultinationalCorporation

Filing

Compose CbCR Message

Encrypt/Decrypt Message Send Message

Manage Inbound Message Archive

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Adaptable Long Lasting Solution

Designed to be extended to address a variety of tax information exchange needs, current and future• Enhancements based upon by Tax Authority needs; CRS,

TP Comparables, Tax Rulings, ect.• Designed so approved vendors can supply enhancements

in a way that extend functionality or address country-specific needs

• New application modules share consistent security, look and feel and access controls, governance, etc.

• Support for other (regional) messaging gateways could be added over time; eg. CCN in EU

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Common Reporting Standard (CRS)• Significant features in common

Manage Reportable

Jurisdictions

Manage Contacts of Reportable Jurisdiction

Manage Reporting Financial

Institution

Request / Accept

Reportable Account Info

Compose CRS Message

Encrypt/Decrypt Message Send Message

Manage InboundMessage Archive

Example: TIE Potential Enhanced Functionality

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TIE Examples: Future Functionality

Supports Expansion from CbCR to other information exchange and functional needs• Country extensions to CbCR data format• Common Reporting Standards• Tax Rulings• Bespoke Information Exchanged upon Request• Beneficial Ownership Information• Tax Treaty Information• Transfer Pricing Arms-length Comparables• Feature: Translation of currency, language• Feature: Analytics and integration with existing data

SOLUTION CONCEPT

INFORMATION ACCESS IMPLICATIONS

ADDRESSING KEY CBCR REQUIREMENTS

FUNCTIONALTY & ADAPTATION

KEY CAPABILITIES DISCUSSION

DATA SECURITY

25

EXAMPLE INFORMATION FLOW

CONTEXT

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CbC Report Files in Country A

CbC

Company Boundaries

Country A

CbC content in format required by the headquarter residence authority

Report Lists Activity in Countries A,B, C, D, E

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Exchange of Information Required

CbC

Company Boundaries

Country A

CbC content in format required by the headquarter residence authority

Report Lists Activity in Countries A,B, C, D, E

Country B

Country C

Country D

Country E

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CTS and Other Formats Needed

CbC

Company Boundaries

Country A

CbC content in format required by the headquarter residence authority

Report Lists Activity in Countries A,B, C, D, E

Country B

Country C

Country D

Country E

CbC CTS

CbC CTS

CbC

CbC CNN

CTS

CbC Proprietary

XXX

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TIE App Simplifies and Standardizes

CbC

CbC Data in Outbound Format, Encryption and Transmission

Protocol, Currency, Language of Country A

CbC

Company Boundaries

CTS

Translation

CbC CTS

CbC

CbC CNN

CTS

Country B

Country A

Country C

Country D

CbC content in format required by the headquarter residence authority

Country E

CbC Proprietary

To Country E per Custom Enhancement

MetricsMetadata

TIE Application

XXX

Report Lists Activity in Countries A,B, C, D, E

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Provides Standard Technical Services

CbC

CbC Data in Outbound Format, Encryption and Transmission

Protocol, Currency, Language of Country A

CbC

Company Boundaries

CTS

Translation

CbC CTS

CbC

CbC CNN

CTS

Country B

Country A

Country C

Country D

CbC content in format required by the headquarter residence authority

Country E

CbC Proprietary

To Country E per Custom Enhancement

MetricsMetadata

XXX

Report Lists Activity in Countries A,B, C, D, E

TIE Application

Identity Service

Credentials

Credentials

Credentials and Policies of Government exchange are managed by the Competent Authorities w/in TIE Apps

Transmission Authorization

Service

Access Control List/

Treaty and Peer Review Service

Country A List Excludes Country

C

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TIE Information Flow Example

Identity Service

CbC

CbC Data in Outbound Format, Encryption and Transmission

Protocol, Currency, Language of Country A

CbC

Credentials

Credentials

Company Boundaries

CTS

Credentials and Policies of Government exchange are managed by the Competent Authorities w/in TIE Apps

Translation

CbC CTS

CbC

CbC CNN

CTS

Country B

Country A

Country C

Transmission Authorization

Service

Access Control List/

Treaty and Peer Review Service

Country A List Excludes Country

C

Country D

CbC content in format required by the headquarter residence authority

Country E

CbC Proprietary

To Country E per Custom Enhancement

MetricsMetadata

TIE Application

XXX

Report Lists Activity in Countries A,B, C, D, E

SOLUTION CONCEPT

INFORMATION ACCESS IMPLICATIONS

ADDRESSING KEY CBCR REQUIREMENTS

KEY CAPABILITIES DISCUSSION

DATA SECURITY

27

EXAMPLE INFORMATION FLOW

CONTEXT

FUNCTIONALTY & ADAPTATION