When heads of state gathered for the London G20 meeting last month to talk about saving the world economy and doing something about tax havens they did so following an unprecedented rush among offshore tax jurisdictions to sign up to a host of treaties on information sharing.

However, it now turns out that the bilateral agreements between an offshore location and a big nation were not the best way forward. Instead, what was needed was a host of ‘multi-lateral’ agreements involving groups of nations.

Traditionally, bilateral tax information exchange agreements (TIEAs) are the most common form of treaty, with provisions negotiated and agreed upon by two tax jurisdictions.

Following the G20 summit, the global push for increased transparency and co-operation has inevitably led to many jurisdictions rushing through agreements in a bid to be removed from the OECD’s critical ‘grey list’ ­ that had still to achieve standards for international tax reporting and information sharing ­ to find a much sought-after place on a white list.

But bilateral arrangements can take a long time to come to fruition leaving low-tax jurisdictions claiming that even if they wanted to, they can’t sign up to them any faster. Recent agreements signed by the Isle of Man are a good example. Some have taken from 2002 to put to bed.

The negotiation of tax treaties requires both resources and time, even for wealthier nations. It is estimated there are up to 72 secrecy jurisdictions around the world, and more than a hundred countries which could negotiate TIEAs.

Not only would multilateral TIEAs remove administrative barriers, but they would ultimately allow a broader engagement between jurisdictions through the automatic collecting of tax data in co-signing countries. The political agenda of individual countries is also removed.

According to Malcolm Couch, of the Isle of Man tax department, multilateral TIEAs are indisputably the way forward. ‘Multilateral has to be a model of the future.

‘Some of the countries with finance services have small administrations, so to get involved in a large number of negotiations is a big commitment, which is why the OECD is considering a multilateral approach and to build the capacity of these smaller finance centers where there might be two or three people,’ he says.

‘We’ve been in the swim of this process for nine years and have been negotiated with countries for almost as long… it takes a long time for countries to line them up for a bilateral signing ­ there’s no quick fix,’ he adds.