provisionally-largely-compliant

Nauru

To see the determinations and rating of all published reports click here.

Overall rating is Provisionally Largely Compliant

Nauru has been reviewed under the fast-track procedures and assigned provisional overall rating. Nauru will be scheduled to undergo a full review under the strengthened 2016 Terms of Reference in the near future.

Table of Determinations and Ratings of the Supplemental Review

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 in place.   Identity and ownership information may not consistently be available in respect of (i) domestic trusts and (ii) foreign trusts with a Nauruan trustee.   Nauru should ensure the availability of ownership and identity information in respect of settlors and beneficiaries of domestic and foreign trusts in all cases.  
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Nauru law does not ensure that reliable accounting records are kept domestic and foreign trusts with a Nauruan trustee, that do not conduct a business in Nauru.  Nauru should establish obligations and effective penalties for the maintenance of reliable accounting records, including underlying documentation, for domestic and foreign trusts with a Nauruan trustee for a minimum 5 year period. 
Companies and partnerships that do not conduct a business in Nauru are not required to retain underlying documentation in accordance to the international standard.   Nauru should establish obligations for the maintenance of underlying documentation for all companies and partnerships even if not conducting a business in Nauru for a minimum 5 year period. 
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 in place.      
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 in place.      
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Nauru should continue to develop its exchange of information 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.      

Earlier self-assessment based annual reports entitled Tax Co-operation 2010: Towards a Level Playing Field are also available.