BERMUDA has become the latest country to sign up to the OECD’s tax transparency agreement; just weeks after the Panama Papers exposed the tax havens of the rich and powerful.
Bob Richards, Bermuda’s minister of finance, revealed that the country signed the OECD’s Multilateral Competent Authority Agreement (MCAA) last week, enabling the sharing of country-by-country reports with 31 other nations.
In January the UK, France, Germany, Luxembourg, Ireland and 26 other nations signed the OECD agreement in Paris. The initiative aims to help tax authorities like HMRC gain a complete understanding of the way multinational corporations structure their operations. The United States has not signed the treaty.
Under the agreement, tax administrations of all the nations involved will receive aggregate information from multinationals annually, starting with their 2016 accounts. The countries involved will then be able to exchange information from 2017 to 2018.
Country-by-country reporting will also force companies to reveal information about particular jurisdictions they do business in and the business activities each entity engages in.
‘Bermuda is again setting an example’
Bermuda’s announcement comes less than three weeks after 11.5 million leaked documents from Panamanian offshore law firm Mossack Fonseca uncovered how powerful political figures and some of the world’s wealthiest stash their money in offshore tax havens.
Since the leak tax authorities from around the world have sprung into action.
David Cameron recently announced plans to introduce a new criminal offence for corporations that fail to take adequate steps to prevent the facilitation of tax evasion, as well as creating a joint taskforce to deal with all elements of the Panama Papers.
George Osborne also announced that the EU’s five largest economies have come together to automatically share information on the ultimate owners of companies and new registers of trusts.
Bob Richards, Bermuda’s minister of finance said: “We were one of the first jurisdictions in the world to sign up to the common reporting standard in 2014 as an early adopter of CRS and so I am proud Bermuda is again setting an example in adopting the country-by-country reporting regime without hesitation.
“Our government is committed to upholding international best practice in tax transparency.”
Speaking in the House of Commons minutes after the letter’s delivery, prime minister Theresa May said that it was a 'historic moment from which there can be no turning back'
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