Exchange of Information

Definition ∞ Exchange of Information refers to the systematic sharing of financial and tax-related data between different national tax authorities or regulatory bodies. This process is crucial for combating cross-border tax evasion and ensuring global tax compliance. It involves agreements and frameworks that specify what information is exchanged, how often, and under what conditions. The objective is to provide authorities with the necessary data to accurately assess tax liabilities and detect undeclared assets.
Context ∞ In the digital asset space, news frequently covers the expansion of Exchange of Information mechanisms to include crypto-assets. International bodies are developing standards like CARF to facilitate this exchange, recognizing the borderless nature of digital finance. A critical discussion centers on the technical infrastructure required for secure and efficient data transfer, alongside privacy considerations for individuals. The increased exchange of information represents a significant shift towards greater transparency in the global digital economy.