The internationalization of business operations in a globalised world has led to a substantial increase in crossborder transactions and activities liable to taxation. This development presents a huge challenge to national tax regimes. The demand for effective exchange of information results from the divergence between substantive universality and formal territoriality.

Options of information exchange Double Taxation Agreement (DTA) Double Taxation Agreements are agreements between two states, which can be quite comprehensive and are designed to avoid double taxation of income and profits from cross-border economic activity. There are already more than 2,000 such bilateral agreements, with the OECD playing a key role by publishing a regularly revised Model Convention (OECD - MTC). Article 26 of the OECD - MTC specifies the provisions for the
exchange of information.
Tax Information Exchange Agreement (TIEA) These bilateral agreements are agreements on the exchange of information for taxation purposes. They are either drawn up to supplement a DTA or concluded with countries that have no DTAs. Growing pressure on secrecy jurisdictions has led to a marked increase in such agreements, as countries officially listed by the OECD as secrecy jurisdictions
are keen to be removed from the list. The OECD distinguishes between white, grey and black lists.
Multilateral agreements Despite their many advantages, bilateral agreements on the exchange of information also have serious drawbacks.
Multilateral and automatic exchange of information would thus constitute a more efficient approach. There have been precedents, the most well known of which being the European Savings Tax Directive
(STD). It came into force in 2005 and established a functional multilateral system for the automatic exchange of information.
Another precedent is the Convention on Mutual (Administrative) Assistance in Tax Matters, which was drawn up by the European Council and the OECD as early as 1988.
Types of information exchange Bilateral agreements basically distinguish between three types of information exchange:

Exchange of information on request: This type of information exchange corresponds to traditional
administrative assistance based on an individual examination. As the requesting authority cannot intervene in the procedures of the requested authority, this type is referred to as "passive exchange of information".

Spontaneous exchange of information: Information is provided without a request by a foreign financial authority based on an individual examination. This type is also referred to as "international tax-audit tracer
note".

Automatic exchange of information: Information is also provided without a request being made. Contrary to spontaneous exchange of information it is not based on an individual examination,
but the foreign state provides information in abstract case categories on its own initiative.
In any case, however, exchange of information should be carried out with both a sense of proportion and due consideration for the rights of the individual taxpayer.