By making the agreement an international standard, tax authorities are moving from bilateral to multilateral cooperation and from exchange of information on request to automatic exchange of information.

“This convention provides the ideal instrument to swiftly implement automatic exchange, and to do so with a wide range of partners. This also represents another significant step in the strengthening of collaboration between China and the OECD,” said OECD secretary general Angel Gurría.

After the credit-crunch, offshore tax havens have been thrust into the spotlight as governments in Europe and the US especially, have made it a key priority to increase transparency and crack down on tax evasion and secrecy.

The new regulations will therefore provide for simultaneous tax examinations and assistance in tax collection. A key feature of the convention is its compliance with national tax laws, which respect the rights of taxpayers by protecting the confidentiality of the information exchanged.

With China, the new tax rules are supported by 56 signatories across the globe including: Albania, Argentina, Australia, Austria, Azerbaijan, Belgium, Belize, Brazil, Canada, Colombia, Costa Rica, China, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Ghana, Greece, Guatemala, Iceland, India, Indonesia, Ireland, Italy, Japan, South Korea, Latvia, Lithuania, Luxembourg, Malta, Mexico, Moldova, Morocco, the Netherlands, New Zealand, Nigeria, Norway, Poland, Portugal, Romania, Russian Federation, Saudi Arabia, Singapore, the Slovak Republic, Slovenia, South Africa, Spain, Sweden, Tunisia, Turkey, the Ukraine, the UK, and the US.