“As a matter of course”……What does that mean really; and why is that language used in the recently signed Inter-Governmental Agreement (IGA) between Germany and US designed to help German financial institutions comply with the US Foreign Account Holder Tax Compliance Act?
You couldn’t look much harder for a more imprecise expression than …”as a matter of course”
That said though we already have the phrase “foreseeably relevant” used to describe the G-20/OECD standard for tax information exchange ‘on request’, now reflected in dozens of tax treaties and tax information exchange agreements. State parties to these bilateral arrangements are still hard pressed to explain exactly what the word ‘foreseeably’ adds to the word ‘relevant’. Indeed, the word relevant is as clear and unambiguous a word as you will find. Does it matter whether the information is foreseeable, probable, predictable, likely imaginable conceivable calculable, anticipatable, or projected? Even if the tax information is imaginable (another synonym for foreseeable) the point is that it has to be relevant.
Of course, that obvious point aside, countries have signed up to the term ‘foreseeable relevant’ hoping that once all of their agreements contain this term of art, on this point at least, there can be no quarrel about their bona fides in relation to compliance with the ‘on request’ standard.
With five years of talking around ‘foreseeable relevant’ most treaty partners know what it is supposed to mean even if they can’t articulate it in words without resorting to the word relevant, or its several synonyms.
Still this is what happens when treaty-model making is a matter of securing consensus in a group with French and English as their official languages. As between the US and Germany there are also two languages at play – German and English; three if you count American English. So to return to the recently signed IGA both parties have agreed “to share information as a matter of course.”
Understanding what “as a matter of course” means matters because according to the Germans, the accord “marks an important step toward the implementation of a global model for the automatic sharing of tax-relevant information.”
So it’s back to the question.
The Cambridge dictionary defines this idiom as the way things are normally done and not anything special. Of course FATCA, as the extra territorial extension of US domestic tax law is special. In fact, it is very special and it certainly does not represent the ‘way things are normally done.’
Merriam Webster offers the following guidance: “something that is to be expected as a natural or logical consequence.” Here again there is nothing natural or logical about this type of information sharing.
The Cambridge Dictionary of Idioms suggests that when something happens ‘as a matter of course’, it happens without people thinking about whether they want it or not. Now this definition is somewhat closer to the truth, given the discussion about the volume of information that will be generated by FATCA; and more particularly, the fact that there may be no conscious inquiry by the FATCA compliance officers in financial institutions or by the IRS about whether they actually want all of the information they are likely to receive under IGAs. It is however true that FATCA sets some minimum thresholds. So I guess that should mean that whatever they get is exactly what they wanted and needed, all the time, every time.
Perhaps though the most accurate definition of ‘as a matter of course’ comes from the Collins American Dictionary of Idioms. It defines the phrase to mean something which is done naturally or automatically.
Accepting that the IGA is based on a model American text with precious little negotiation of the principal terms, I expect that despite the possibilities canvassed above, ‘as a matter of course’ means automatically.
All of this might seem pedantic but it is worthwhile being clear about what the specific language of FATCA inspired IGAs means because they are set to be the global benchmark for automatically exchanging confidential tax information; or to put in American, exchanging information “as a matter of course.”
Besides, if the global language of tax information exchange is going to be American, then we all better get familiar with this Yankee derivative of the Queen’s English.