In February 2021, the OECD released the renewed Terms of Reference and Methodology for peer reviews (also available in French) on the Action 5 standard for the exchange of information on tax rulings (the "transparency framework") for the years 2021-2025, as approved by the Inclusive Framework on BEPS. The peer review documents for the period 2017-2020 remain available.

The peer review and monitoring process is conducted by the Forum on Harmful Tax Practices (FHTP) in accordance with the Terms of Reference and Methodology, with all members participating on an equal footing.

The Terms of Reference are broken down into four aspects, which capture the key elements of the transparency framework:

1. Information gathering process;
2. Exchange of information;
3. Confidentiality of information received;
4. Statistics.

The methodology sets out the procedural mechanisms by which jurisdictions will complete the peer review, including the process for collecting the relevant data, the preparation and approval of reports, the outputs of the review and the follow up process. The methodology contemplates collecting the data points relevant to the peer review by using standardised questionnaires, sent to the reviewed jurisdiction as well as the peers (i.e. the other members of the Inclusive Framework on BEPS).

Peer Review Reports on the Exchange of Information on Tax Rulings

• 2022 Peer Review Reports - This report reflects the outcome of the seventh annual peer review of the implementation of the Action 5 minimum standard and covers 131 jurisdictions. It assesses implementation for the 1 January-31 December 2022 period.
• 2021 Peer Review Reports - This report reflects the outcome of the sixth annual peer review of the implementation of the Action 5 minimum standard and covers 131 jurisdictions. It assesses implementation for the 1 January-31 December 2021 period.
• 2020 Peer Review Reports - This report reflects the outcome of the fifth annual peer review of the implementation of the Action 5 minimum standard and covers 131 jurisdictions. It assesses implementation for the 1 January-31 December 2020 period.
• 2019 Peer Review Reports - This report reflects the outcome of the fourth annual peer review of the implementation of the Action 5 minimum standard and covers 124 jurisdictions. It assesses implementation for the 1 January-31 December 2019 period.
• 2018 Peer Review Reports - This report reflects the outcome of the third annual peer review of the implementation of the Action 5 minimum standard and covers 112 jurisdictions. It assesses implementation for the 1 January–31 December 2018 period.
• 2017 Peer Review Reports - This report reflects the outcome of the second annual peer review of the implementation of the Action 5 minimum standard and covers 92 jurisdictions. It assesses implementation for the 1 January–31 December 2017 period.
• 2016 Peer Review Reports - The first annual report on compliance with the transparency framework covers the jurisdictions which participated in the BEPS Project prior to the creation of the Inclusive Framework. It assesses implementation for the 1 January–31 December 2016 period.

The Exchange on Tax Rulings XML Schema and User Guide standardised electronic format for the exchange on tax rulings between jurisdictions.

A dedicated XML Schema and User Guide have also been developed to provide structured feedback on received exchange of tax rulings (ETR) information. The ETR Status Message XML Schema will allow tax administrations to provide structured feedback to the sender on frequent errors encountered, with a view to improving overall data quality and receiving corrected information, where necessary.

The current version of the ETR XML Schema and User Guide, as well as the related Status Message Schema and User Guide, is applicable for all exchanges until 31 March 2020, whereas the second, new version will be in use as from 1 April 2020.

The Inclusive Framework on BEPS has decided to resume the application of the substantial activities requirement for no or only nominal tax jurisdictions. Originally a criteria set out in the harmful tax framework from 1998, it had not been applied to date. However, with the elevation of the substantial activities requirements in preferential regimes, and the broad-based membership of the Inclusive Framework working together on an equal footing, it was considered the right time to ensure that equivalent substance requirements apply in no or only nominal tax jurisdictions. This global standard means that mobile business income cannot be parked in a zero tax jurisdiction without the core business functions having been undertaken by the same business entity, or in the same location. In doing so, the Inclusive Framework will ensure that substantial activities must be performed in respect of the same types of mobile business activities, regardless of whether they take place in a preferential regime or in a no or only nominal tax jurisdiction.

In October 2019, the Inclusive Framework released additional guidance on the framework for the spontaneous exchange of information collected by no or only nominal tax jurisdictions pursuant to the standard. The guidance addresses the practical modalities regarding the exchange of information requirements of the standard, including the exchange timelines, the international legal framework and clarifications on the key definitions. The guidance also contains the standardises IT-format to be used for the exchanges, the NTJ XML Schema.

The 11 no or only nominal tax jurisdictions (Anguilla, Bahamas, Bahrain, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey, Turks and Caicos Islands) have been exchanging information under the NTJ standard since 2021. The exchanges not only provide key data on the substance and activities of entities in no or only nominal tax jurisdictions to the jurisdictions in which the immediate and ultimate parent and the beneficial owners of the entities are resident but also enable receiving tax administrations to carry out risk assessments and to apply their controlled-foreign company, transfer pricing and other anti-base erosion and profit shifting provisions.

In order to ensure the effectiveness of the NTJ standard in practice, the FHTP is carrying out annual monitoring of the compliance of the 12 no or only nominal tax jurisdictions. The latest results, released in February 2024, can be consulted here.