Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information

MULTI-SIDED AUTHORIZED AUTHORITY AGREEMENT ON THE AUTOMATIC EXCHANGE OF FINANCIAL ACCOUNT INFORMATION

As a result of globalizing economic activities, the international flow of securities has forced states to develop a control mechanism to ensure security and transparency. In 2011, Turkey also to ensure the reliability and transparency at the international level "has signed the Convention on Mutual Administrative Assistance in Tax Matters. A Multilateral Competent Authority Agreement on Automatic Exchange of Financial Account Information has been drawn up for the implementation of the said Agreement. Turkey, while in 2017 the Financial Account Information Authority signed the Multilateral Agreement on Automated Change Resolution No. 1965 but was confirmed by the Republic of Turkey on 31.12.2019.

Agreement for Turkey, generally residing in the country side and Turkey Turkish citizens abroad in the side of financial information residing side nationals regulates the mutual sharing states. According to the data announced by the Ministry of Foreign Affairs, approximately 6.5 million Turkish Citizens live abroad. The majority of Turkish citizens living in other countries are in the states party to the treaty and frequently provide or invest in securities into the country. Since the entry into force of the mentioned agreement will affect a wide population, the agreement will be examined in detail below.

1) Data to be Shared Under the Agreement

Data to be shared with the states parties as stated in the 2nd paragraph of Article 2 of the Agreement:

- If the sharing of account information is a real person within the scope of the agreement; name, address, tax number, date and place of birth, account number, account balance as of the reporting period, closing if the account is closed,

- If it is a legal person whose account information is covered by the agreement; name / title, address, tax number, account number, name, address, tax number, date and place of birth of the Notification Compulsory Controller of the legal entity, account balance as of the reporting period, closing if the account is closed,

- For all kinds of people; account custody or deposit account, in addition to this information, the revenues obtained from the amount in the account and revenues only for custody accounts.

Apart from this information, no other financial data transfer will take place, including real estate and vehicle information.

Current account balance, value and account income on December 31 of the relevant calendar year will be reported, details of account transactions will not be shared.

2) Persons to be Shared Under the Agreement

- Citizens of the Contracting States residing in the other state party,

For example; It is a Turkish national financial data relating to accounts in Turkey within the scope of this agreement Women residing in Germany will be shared with the Federal Republic of Germany.

- State party affiliated legal entities who are resident or taxpayers in that state in accordance with the legislation of the state party to the agreement

For example; Mr. B's founder built in Norway, where the Norwegian company X established in this behalf shall be subject to notification if it satisfies the other conditions account opened in Turkey.

3) Institutions obliged to transmit the data to the authorized institution

Deposit organizations (banks in general), depository institutions (custody banks etc.), investment institutions (such as investment banks and funds), certain insurance companies.

The financial data of the person who has an account in the above-mentioned institutions and is within the scope of the agreement is shared with the Revenue Administration by the above-mentioned institution. There will be no direct international data transfer from the institutions where the accounts are located. The agency said the agreement will allow the transfer of data in the relevant international level with Turkey, the Agreement "Coordination Body Secretariat" is referred to as the Treasury and is affiliated with the Ministry of Finance Revenue Administration Presidency.

4) Reciprocity (Reciprocity)

The agreement has been prepared multilaterally due to its nature and it is mainly aimed to share data mutually. Therefore, information sharing will take place bilaterally. However, in accordance with Article 1 of the Agreement, some states will only be obliged to share the data in their country, but they will not be able to receive data from the country where they share the data. Turkey, August 2020. As of 57 countries in the relationship is reciprocal data sharing, said the OECD (Organization for European Economic Cooperation) can be traced to date on the website.

Contracting Parties of Germany, the Netherlands, Belgium, Austria and France, data for which they have not shared the information of year 2019 2020 Turkey's shared calendar in exchange of information.

5) The status of the accounts opened before and after the contract

As can be seen in the annexes of the agreement, the accounts opened on 01.07.2017 and after will be subject to the procedure separately as newly opened accounts, and the accounts existing before this date as old accounts.

• New account information given in person when opening the account with the statement that it is built in Turkey does not contradict, the person is considered to be resident in Turkey, so people do not share information about their account in Turkey. It is not the citizenship of the person that matters, but the tax liability.

An amount separation has not been made for the balance and values ??of the new accounts, so the above-mentioned data regarding the accounts opened after 01.07.2017 of the persons covered by the Agreement will be subject to mutual sharing.

• In the old account address associated with the account statement relating to the settlement of Turkey will not be enough if it is a different country record. For example; settling in Turkey Turkey in case of a person of interest built-in accounts on the phone records of bank accounts in the Netherlands, it has to be proven. settlement to refrain from notification of the account holder must prove that the Turkey.

For old accounts, there is an amount limit foreseen in the guide regarding the implementation of the Agreement published by the OECD, this amount varies depending on whether the account belongs to an individual or a legal person.

- Accounts under $ 1,000,000 owned by an individual are considered low value. However, Turkey Agreement will apply regardless of the limit values ??in individual accounts, so whatever the value of individual accounts are covered by the notification.

- Accounts under $ 250,000 owned by a legal entity are considered low value. Low value accounts are not required to be notified.

6) Status of Passive / Inactive Accounts

By the account holder; Accounts for which no account activity has been carried out for the last 3 years and that has not been contacted with the financial institution for the last 6 years are considered dormant accounts in terms of automatic information exchange provided that the balance does not exceed USD 1,000 and no notification is made.

7) Joint Accounts

In the event that the account to be notified under the Agreement belongs to more than one person, the data regarding the account will be shared on behalf of the person under the Agreement. However, in the case of a joint account, the value and balance of the account are not divided by the number of partners, it is reported as a whole.

8) Relationship with the Law on Protection of Personal Data

"Automatic information exchange is mutually carried out within the scope of the international agreement (on the basis of reciprocity) of the Revenue Administration, which is the competent authority in the implementation of the contract, so it does not constitute a violation of the Personal Data Protection Law. Within the scope of the Personal Data Protection Law numbered 6698, it is not possible to prevent automatic information exchange by petitioning that the transfer of data abroad is not consented. He made a statement as.

Demirkılıç Law Office