The confidentiality of information obtained in the course of a tax official's duties is a crucial issue within a tax administration. Failure to properly manage the responsibility of confidentiality can challenge the integrity of the Host Administration, whose audit capacity the Expert is working to build. Additionally, breaches of confidentiality may potentially give rise to litigation by taxpayers for (alleged) breach of the obligation.

It is therefore crucial that all parties of a TIWB programme consider and address confidentiality in the TIWB programme Terms of Reference. First, an understanding is needed of the source(s) and scope of the confidentiality duties imposed on tax officials in the Host Administration. It is the responsibility of the Host Administration to bring the obligations of confidentiality to the attention of the Expert. The Host Administration should also provide guidance on the proper handling of tax information (for example, clean desk policy) to ensure that its tax confidentiality obligation is upheld.

The second aspect is to ensure that the Expert, to the extent possible, will be subject to the same or equivalent obligations as the local officials. The Host Administration needs to determine how the same or equivalent confidentiality obligations that apply to local tax officials will apply to the Expert. For example, the obligations may apply directly to the Expert because the Expert falls within the definition of persons subject to those obligations under the relevant legislation. Alternatively, the Terms of Reference may ensure that equivalent obligations are imposed on the Expert. This may also involve the Expert taking the same oath or making an affirmation of secrecy as local tax officials.

On a practical level, Experts must fully understand the nature and scope of their obligations of confidentiality and the possible consequences and appropriate management process in case of a breach.

The parties should have a clear understanding of how an alleged breach of tax confidentiality will be addressed. Any such issue involving an Expert who is a currently serving official is likely to require some involvement of the Partner Administration, and this procedure should be determined in advance and defined in the TIWB programme Terms of Reference.

It is important to ensure that investigations on breach of confidentiality are appropriately carried out before a determination is made on whether a breach has in fact occurred and the circumstances of that breach. During that investigation process, appropriate support for the Expert should be provided from the Host Administration and any Partner Administration, if the Expert is a currently serving official. The obligation of confidentiality of tax information is perpetual, extending beyond the end of the TIWB programme. In this regard, Partner Administrations must also note that, upon returning, Experts cannot share any confidential tax information obtained in the course of their duties as an Expert in the Host Administration.

Experts must also appreciate that the obligations of confidentiality to which they were or are subject as an official of the Partner Administration or their former administration, will continue to apply during the TIWB Programme.

There is a direct link between issues of confidentiality and the potential liability of the Expert if an issue of a breach of confidentiality arises.

Legal provisions and other rules establishing tax information confidentiality

Specific provisions in a country's tax legislation commonly protect confidentiality of taxpayer information. In general, these provisions make it a criminal offence for tax officials to disclose information relating to a taxpayer that was obtained in the course of the performance of their duties. There is no universal definition of what constitutes tax information; however, in general, it covers all information obtained in the course of a person's duties as a tax official. The obligation to maintain confidentiality applies even after the official has ceased to work for the tax administration.

In addition to a tax law requirement, an obligation of confidentiality may arise from broader laws or regulations that apply to all civil servants. These may be obligations contained in the country's constitution or obligations arising from international agreements, such as double taxation agreements. Obligations of confidentiality, as well as other aspects of a tax official's conduct and duties, may also be founded in codes of conduct issued to tax officials or to all civil servants. This may include an oath or affirmation of secrecy that tax officials make before assuming their duties, or it may form part of the employment contract offered by the tax administration. An Expert may be required to take an equivalent oath of conduct before participating in the TIWB audit assistance programme.

In addition to the tax administration, other state institutions may be charged with monitoring how tax confidentiality is dealt with in practice. This could include supervision by Courts of accounts, internal audits, and investigations by anti-corruption agencies or tax police, and may have capacity to apply sanctions in cases of breach of tax confidentiality. The Expert must be made aware by the Host Administration of all the legal provisions governing confidentiality and spelling out sanctions for breach as part of any signed confidentiality agreement/oath of secrecy.