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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 jurisdiction's make in response to the Global Forum's recommendations.

Peer Review: Marshall Islands Phase 1 Review

This report for Marshall Islands has been published on 29 Oct 2012. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the table of determinations.




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.   Bearer shares can be issued by non-resident domestic corporations in the Marshall Islands. Appropriate mechanisms to allow identification of owners of bearer shares are not in place.  The Marshall Islands should ensure that appropriate mechanisms to identify owners of bearer shares are in place. 
Ownership and identity information for resident and non-resident domestic LLCs, Foreign Maritime Entities, nominee shareholdings and limited partnerships, Marshall Islands’ trusts and foreign trusts is not available in all circumstances.  The Marshall Islands should ensure that ownership and identity information is available for all entities. 
There are no sanctions for not maintaining ownership and identity information under Marshall Islands law.  The Marshall Islands should introduce effective sanctions against entities and arrangements where they fail to comply with requirements to maintain ownership and identity information. 
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.   All resident and non-resident domestic corporations and Marshall Islands trusts are required to maintain correct and complete books and records of account. However, it is uncertain that these requirements ensure keeping of accounting records consistent with the standard. Additionally, the laws of the Marshall Islands do not contain explicit obligation for foreign corporations, FMEs, LLCs and partnerships to keep accounting records.  The Marshall Islands should ensure that its laws explicitly require all entities to keep full accounting records that would allow the entity to correctly explain all transactions, enable financial position of the entity to be determined with reasonable accuracy at any time and allow financial statements to be prepared. 
The laws of the Marshall Islands do not contain explicit obligations requiring all types of entities to keep underlying documentation consistent with the standard.  The Marshall Islands should ensure its laws explicitly require all entities to keep full underlying documentation consistent with the standard. 
The laws of the Marshall Islands do not explicitly stipulate a retention period for accounting records and underlying documentation in respect of all entities.  The Marshall Islands should ensure that its laws explicitly require all entities to keep accounting records and underlying documentation for at least five years. 
The commercial and tax laws of the Marshall Islands do not contain any sanctions for not keeping accounting records.  The Marshall Islands should ensure that its laws prescribe appropriate sanctions against entities and arrangements for their failure to keep reliable accounting records consistent with the standard. 
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, but certain aspects of the legal implementation of the element need improvement.   The access powers of the Secretary of Finance to obtain information for EOI purposes may be constrained by a domestic tax interest.  The Marshall Islands should clarify its laws to ensure that its competent authority has the power to obtain information for EOI purposes in all cases. 
The scope of professional privilege in the Marshall Islands extends to accountants and its impact on effective exchange of information is unclear.  The Marshall Islands should ensure that domestic provisions on professional privileges relating to accountants allow exchange of information in line with the standard. 
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, but certain aspects of the legal implementation of the element need improvement.   The access powers of the Secretary of Finance to obtain information for EOI purposes may be constrained by a domestic tax interest.  The Marshall Islands should clarify its laws to ensure that its competent authority has the power to obtain information for EOI purposes in all cases. 
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     The Marshall Islands 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.