National Legislation Safeguarding Bank Secrecy and the Steps Needed to Comply with the Effective Exchange of Information Standards: A Comparative Study

Abstract The exchange of tax-related information, as one of the major aspect of international tax cooperation in combating tax evasion and harmful tax practices by means of Double Taxation Agreements (DTAs), was an effective means of preserving bank secrecy. This fact was true until 2002, since the increase and expantion in crossborder transactions, through globalisation and governmental harmful competition to attract foreign direct investment, have led to reform in the international exchange of information policy and require more effective transparency. In April 2009, the G20 leaders. at their London Summit, declared that: ''The era of banking secrecy is over'' and that all countries must conform with the effective exchange of information standards (formally called: the key principles of transparency and information exchange for tax purposes). One element of these standards is that no restriction to information exchange could be caused by application of a domestic tax interest requirement or bank secrecy. In this article the author will not try to investigate the legality or legitimacy nor the logic behind effective exchange of information standards, since the main purpose of this article is to examine Jordanian and Egyptian legislation defects and the steps needed by legislators and policy makers to follow these standards.