The main concern about the IGAs is that they enshrine the bilateral model of tax information exchange that has dominated the 20th century. Unfortunately, there are good reasons to believe this bilateral model does not work, especially when IGAs are signed with countries like the Cayman Islands who have no interest in reciprocity and every interest in making them not work.
Instead, there is an alternative. In response to the financial crisis and the outrage it caused in Europe about tax evasion by the wealthy, the OECD has proposed a Multilateral Agreement for Administrative Assistance in Tax Matters (MAATM), which has by now over  signatory countries. The MAATM provides for automatic exchange of information and because it is multilateral it overcomes the problem of non-reciprocity that bedevils the tax treaties, bilateral TIEAs, and the IGAs.
In what follows, we will argue that the MAATM model is superior, and that therefore the US and OECD should abandon tax information exchange and administrative assistance under articles 26 and 27 of the tax treaties, as well as bilateral TIEAs and IGAs, and instead commit to the MAATM.
Law | Taxation-Transnational
Date of this Version
Working Paper Citation
Avi-Yonah, Reuven S. and Savir, Gil, "IGAs vs. MAATM: Has Tax Bilateralism Outlived Its Usefulness?" (2014). Law & Economics Working Papers. 95.