GLOBAL DEVELOPMENT OF INFORMATION EXCHANGE: RULE-MAKER VERSUS RULE-TAKER IN INTERNATIONAL TAX LAW

The expansion of information exchange networks means that the world seems to be becoming more transparent. This expansion has been accelerated by the exposure of secrecy jurisdictions that facilitate tax evasion and avoidance, while the abuse of bank secrecy justifies national and international efforts to improve transparency. But why is the acceptance of the new information exchange standards so widespread, even though not every jurisdiction is interested in acquiring this information? This article examines stakeholder attitudes to exchanging information by distinguishing two groups: rule-makers and rule-takers. It aims to show that the United States and the Organisation for Economic Co-operation and Development, two representative rule-makers, have played significant roles in promoting the new information exchange standards, while the rule-taker group has little choice but to comply with these new practices. Hong Kong has been chosen as a case study as a rule-taker because its territorial tax system benefits little from information exchange.