Tax Information Exchange Agreement
Tax Information Exchange Agreement : A TIEA imposes on the agreeing countries a mutual and reciprocal obligation to exchange information relating to the enforcement of their respective tax laws. A TIEA provides a means by which a signatory government can pursue certain tax evaders, particularly in cases involving large tax claims or drug enforcement. Countries that sign a TIEA agree to: (a) exhange tax information at the government level in a form admissable to U.S. or host country courts; (b) collect information without regard to the taxpayer's nationality; (c) establish a means for compelling the production of tax information; and (d) ensure that local laws do not prohibit the sharing of tax information. A TIEA can support tourism in a signatory country because the Agreement facilitates Internal Revenue Service approval of the destination as a necessary business expense (deductible for Federal income tax purposes) for U.S. citizens and companies which seek to justify attendance at business conventions and seminars in a signatory country
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