Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Botswana 2016 : Phase 2: Implementation of the Standard in Practice

92 Pages·2016·1.368 MB·English

by  OECD

Global Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
for Tax Purposes
OF INFORMATION FOR TAX PURPOSES
PEER REVIEWS, PHASE 2: BOTSWANA
This report contains a “Phase 2: Implementation of the Standards in Practice” review, as well
as revised version of the “Phase 1: Legal and Regulatory Framework review” already released
Peer Review Report
for this country.
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
Phase 2
multilateral framework within which work in the area of tax transparency and exchange of
information is carried out by over 130 jurisdictions which participate in the work of the
Global Forum on an equal footing. Implementation of the Standard
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the standards of transparency and exchange of information for tax purposes. These in Practice
standards are primarily refl ected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax
Convention on Income and on Capital and its commentary as updated in 2004, which has Pe BOTSWANA
e
been incorporated in the UN Model Tax Convention. r R
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The standards provide for international exchange on request of foreseeably relevant vie
information for the administration or enforcement of the domestic tax laws of a requesting w
R
party. “Fishing expeditions” are not authorised, but all foreseeably relevant information must e
p
be provided, including bank information and information held by fi duciaries, regardless of the or
existence of a domestic tax interest or the application of a dual criminality standard. t P
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All members of the Global Forum, as well as jurisdictions identifi ed by the Global Forum as se
2
relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 Im
reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange p
of information, while Phase 2 reviews look at the practical implementation of that framework. lem
Some Global Forum members are undergoing combined – Phase 1 plus Phase 2 – reviews. en
The ultimate goal is to help jurisdictions to effectively implement the international standards tatio
of transparency and exchange of information for tax purposes. n
o
All review reports are published once approved by the Global Forum and they thus represent f th
e
agreed Global Forum reports. S
ta
For more information on the work of the Global Forum on Transparency and Exchange of n
d
Information for Tax Purposes, and for copies of the published review reports, please visit ard
www.oecd.org/tax/transparency and www.eoi-tax.org. in
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ra
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tic
e
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Consult this publication on line at http://dx.doi.org/10.1787/9789264250734-en. O
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This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and W
A
statistical databases. N
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Visit www.oecd-ilibrary.org for more information.
ISBN 978-92-64-25072-7
23 2016 03 1 P

Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Botswana 2016
PHASE 2:
IMPLEMENTATION OF THE STANDARD IN PRACTICE
March 2016
(reflecting the legal and regulatory framework
as at December 2015)
ThisworkispublishedontheresponsibilityoftheSecretary-GeneraloftheOECD.
Theopinionsexpressedandargumentsemployedhereindonotnecessarilyreflect
theofficialviewsoftheOECDorofthegovernmentsofitsmembercountriesor
thoseoftheGlobalForumonTransparencyandExchangeofInformationforTax
Purposes.
Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusof
orsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersand
boundariesandtothenameofanyterritory,cityorarea.
Pleasecitethispublicationas:
OECD(2016),GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeer
Reviews:Botswana2016:Phase2:ImplementationoftheStandardinPractice,OECDPublishing.
http://dx.doi.org/10.1787/9789264250734-en
ISBN978-92-64-25072-7(print)
ISBN978-92-64-25073-4(PDF)
Series:GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeerReviews
ISSN2219-4681(print)
ISSN2219-469X(online)
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TABLE OF CONTENTS – 3
Table of Contents
About the Global Forum                                             5
Executive summary                                                  7
Introduction                                                       11
Overview                                                        12
Botswana tax system                                               13
Compliance with the Standards                                       17
A. Availability of information                                        17
Overview                                                        17
A1 Ownership and identity information                               19
A2 Accounting records                                            39
A3 Banking information                                           44
B. Access to information                                             49
Overview                                                        49
B1 Competent Authority’s ability to obtain and provide information        50
B2 Notification requirements and rights and safeguards                  53
C. Exchanging information                                          55
Overview                                                        55
C1 Exchange-of-information mechanisms                             56
C2 Exchange-of-information mechanisms with all relevant partners        62
C3 Confidentiality                                                64
C4 Rights and safeguards of taxpayers and third parties                  68
C5 Timeliness of responses to requests for information                   69
Summary of determinations and factors underlying recommendations      75
PEER REVIEW REPORT – PHASE 2 – BOTSWANA © OECD 2016
4 – TABLE OF CONTENTS
Annex 1: Jurisdiction’s response to the review report                    79
Annex 2: List of all exchange-of-information mechanisms in force          83
Annex 3: List of all laws, regulations and other material received          85
Annex 4: List of authorities interviewed                                87
PEER REVIEW REPORT – PHASE 2 – BOTSWANA © OECD 2016
ABOUT THE GLOBAL FORUM – 5
About the Global Forum
The Global Forum on Transparency and Exchange of Information for
Tax Purposes is the multilateral framework within which work in the area
of tax transparency and exchange of information is carried out by over
130 jurisdictions, which participate in the Global Forum on an equal footing
The Global Forum is charged with in-depth monitoring and peer
review of the implementation of the international standards of transpar-
ency and exchange of information for tax purposes These standards are
primarily reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the
OECD Model Tax Convention on Income and on Capital and its commen-
tary as updated in 2004 The standards have also been incorporated into
the UN Model Tax Convention
The standards provide for international exchange on request of fore-
seeably relevant information for the administration or enforcement of the
domestic tax laws of a requesting party Fishing expeditions are not authorised
but all foreseeably relevant information must be provided, including bank
information and information held by fiduciaries, regardless of the existence
of a domestic tax interest or the application of a dual criminality standard
All members of the Global Forum, as well as jurisdictions identified by
the Global Forum as relevant to its work, are being reviewed This process is
undertaken in two phases Phase 1 reviews assess the quality of a jurisdic-
tion’s legal and regulatory framework for the exchange of information, while
Phase 2 reviews look at the practical implementation of that framework Some
Global Forum members are undergoing combined – Phase 1 and Phase 2 –
reviews The Global Forum has also put in place a process for supplementary
reports to follow-up on recommendations, as well as for the ongoing monitor-
ing of jurisdictions following the conclusion of a review The ultimate goal is
to help jurisdictions to effectively implement the international standards of
transparency and exchange of information for tax purposes
All review reports are published once approved by the Global Forum
and they thus represent agreed Global Forum reports
For more information on the work of the Global Forum on Transparency
and Exchange of Information for Tax Purposes, and for copies of the pub-
lished review reports, please refer to wwwoecdorg/tax/transparency and
wwweoi-taxorg
PEER REVIEW REPORT – PHASE 2 – BOTSWANA © OECD 2016

ExECUTIVE SUMMARy – 7
Executive summary
1 This report summarises the legal and regulatory framework for trans-
parency and exchange of information (EOI) in the Republic of Botswana as
well as the practical implementation of that framework The assessment of
effectiveness in practice has been performed in relation to a three-year period
(1 January 2012 to 31 December 2014) The international standard which is
set out in the Global Forum’s Terms of Reference to Monitor and Review
Progress Towards Transparency and Exchange of Information is concerned
with the availability of relevant information within a jurisdiction, the compe-
tent authority’s ability to gain timely access to that information, and in turn,
whether that information can be effectively exchanged with its exchange of
information partners
2 Botswana is an independent state located in southern Africa Its
economy is traditionally based on diamonds and agriculture, with tourism
and financial services also making a contribution
3 Relevant entities and arrangements in Botswana include companies,
partnerships, trusts and societies There are no bearer shares or international
entities or arrangements in Botswana
4 Ownership information in Botswana is generally available for rel-
evant entities and arrangements through commercial, tax and anti-money
laundering legislation However, a recommendation is made regarding the
availability of information on the members of societies Enforcement of
these provisions is secured by the existence of significant penalties for non-
compliance However, in practice the overall compliance by companies with
their annual return filing obligation and tax return filing obligation is low
In addition, the oversight of anti-money laundering obligations commenced
recently with respect to parties other than banks Botswana is recommended
to continue to ensure that the compliance with company obligations, tax obli-
gations and customer due diligence obligations are effectively implemented
and monitored
5 Accounting records are generally available in Botswana through
tax and commercial law obligations in respect of entities and arrangements
PEER REVIEW REPORT – PHASE 2 – BOTSWANA © OECD 2016
8 – ExECUTIVE SUMMARy
that are carrying on a business However, recommendations are made
for Botswana to ensure that accounting records, including all underlying
documentation, are always maintained for all entities and arrangements In
practice, some monitoring of the availability of accounting information indi-
cates that accounting information generally appears to be available, however
Botswana is recommended to increase the monitoring of these obligations
6 Financial institutions in Botswana are required to keep records
pertaining to the accounts held by them, as well as related financial and
transactional information In practice, banks are closely supervised to ensure
that they comply with record keeping obligations and banking information
is available
7 Botswana’s legal and regulatory framework permits access to
information for the purpose of responding to a valid request for informa-
tion pursuant to a DTC or TIEA, including access to banking information
These powers are exercised predominately by issuing notices to require the
production of relevant information There are no domestic secrecy provisions
that would interfere with exchange of information, and there is no domestic
tax interest requirement or prior notification requirements In practice, the
competent authority has not received any EOI requests during the review
period, but the tax authority has exercised its powers to access information
for domestic tax purposes
8 The Income Tax Act enables the entry into, and exchange of infor-
mation pursuant to, Tax Information Exchange Agreements (TIEAs), Double
Tax Conventions (DTC) and agreements for assistance in the administration
of and collection of tax The Income Tax Act also imposes confidential-
ity obligations with respect to information exchanged in relation to such
agreements Botswana has been pursuing new DTCs, protocols amending
its existing DTCs and TIEAs in conformity with the international model
agreements Botswana has signed 25 EOI agreements and 14 of these are in
force As a number of signed agreements have not been brought into force for
a period of more than two years, Botswana is recommended to swiftly bring
its agreements into force
9 Botswana’s practical experience with exchanging information is
relatively limited to date During the review period, Botswana did not receive
any EOI requests Botswana has a sound organisational structure in place and
clear written procedures to respond to EOI requests The policies and prac-
tices with respect to confidentiality also appear to be sound
10 Botswana has been assigned a rating for each of the 10 essential ele-
ments as well as an overall rating The ratings for the essential elements are
based on the analysis in the text of the report, taking into account the Phase 1
determinations and recommendations made in respect of Botswana’s legal
PEER REVIEW REPORT – PHASE 2 – BOTSWANA © OECD 2016