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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Peer Review Report Phase 1 Legal and Regulatory Framework - Brunei Darussalam

This report for Brunei Darussalam has been published on 26 Oct 2011. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is not in place.   Companies incorporated outside Brunei which have their place of effective management in Brunei are not expressly required to keep information on their members or shareholders. The requirements applying to foreign international companies are not clear.  An express obligation should be established for foreign companies and Foreign International Companies having sufficient nexus with Brunei to keep identity information concerning their members or shareholders. 
Nominees that are not financial service licensees are not required to maintain ownership and identity information in respect of all persons for whom they act as legal owners.  An obligation should be established for all nominees to maintain relevant ownership information where they act as the legal owners on behalf of any other person. 
For share warrants to bearer issued by companies formed under the Companies Act there are insufficient mechanisms in place that ensure the availability of information allowing for identification of the owners of previously issued share warrants to bearer.  Brunei should either take necessary measures to ensure that appropriate mechanisms are in place to identify the owners of share warrants to bearer or eliminate such share warrants. 
There is no specific requirement that information concerning the settlor, trustees and beneficiaries of express trusts formed under common law be maintained.  An obligation should be established in Brunei to maintain information on the settlors, trustees and beneficiaries of all types of trusts. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is not in place.   Brunei legislation does not ensure that reliable accounting records are kept for companies formed pursuant to the International Business Companies Order, nor for domestic partnerships or trusts.  All relevant entities and arrangements should be required to maintain reliable accounting records for a minimum of 5 years. 
Obligations to keep underlying documentation only apply to entities subject to income tax, that is companies formed under the Companies Act and foreign companies carrying on business in Brunei.  All relevant entities and arrangements should be required to maintain reliable underlying documentation for a minimum of 5 years. 
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is not in place.   In cases where it is not required for its own tax purposes, Brunei has powers to access information (including bank information) only in respect of requests made under agreements that have been declared “prescribed arrangements” by a Sultan’s Order. So far, no such Orders have been made for any of Brunei’s agreements. Only double tax conventions can be prescribed by the Sultan.  Brunei’s law should ensure that all its exchange of information agreements that are in force (regardless of their form) are declared “prescribed arrangements” by a Sultan’s Order. 
The powers to access information given to Brunei’s competent authority under the Income Tax Act do not extend to information in respect of entities formed under the Brunei International Financial Centre legislation.  Brunei should ensure that its competent authority can access information on all types of entities operating in Brunei, included those formed under the BIFC legislation. 
The circumstances under which the requirement to include the name and address of the person believed to have possession or control of the information in each EOI request can be waived are not clear.  Brunei should clarify that the name and address of the person believed to have possession or control of the information will be required only “to the extent known” 
The Registered Agents and Trustees Licensing Order does not provide for exceptions to their secrecy provisions for EOI purposes.  Brunei should ensure that its domestic law provisions regarding confidentiality or secrecy duties, in particular regarding access to information on international trusts, do not prevent effective exchange of information for tax purposes. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place.      
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is not in place.   Brunei’s agreements have not been given full effect to by domestic law as there is no provision granting tax authorities the power to obtain information for its exchange of information partners on entities and arrangements established under the Brunei International Financial Centre legislation. Further, bank, mutual fund and trust information can only be exchanged in respect of prescribed arrangements, but so far none of Brunei’s agreements have been declared “prescribed” arrangements.  It is recommended that Brunei enact necessary legislation to remove various deficiencies noted in this report, which will enable it to comply with and give effect to its EOI agreements. 
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is not in place.   Brunei has a network of EOI arrangements with relevant partners but none of them has been given full effect through domestic law.  Brunei should ensure it gives full effect to the terms of its EOI arrangements in order to allow for full exchange of information to the standard with all its relevant partners. 
  Brunei should continue to develop its EOI network with all relevant partners. 
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.