GEORGE OSBORNE’S call for international tax transparency has been adopted by a host of EU member states and British crown dependencies, as tax authorities look to increase their crackdown on widespread tax evasion.
Key EU allies Germany, France, Italy, Spain and the UK vowed to exchange data on company beneficial ownership registers – the latest move by European powers to tackle offshore tax evasion following the Panama Papers leak.
Crown dependencies Gibraltar, Isle of Man and Montserrat have joined the five EU powers’ initiative, meaning that their tax and law enforcement agencies will now exchange data on company beneficial ownership registers.
The announcement also extends to sharing data on new registers of trusts, a topic that has hit the headlines in the UK following prime minister David Cameron’s connection to Blairmore Holdings, the offshore trust which was named in the Mossack Fonseca data leak.
The pilot will begin to ‘explore the best way for countries to share this information, with a view to developing a truly global common standard in a two-step process leading to the interlinking of national registries’.
Since Osborne made the announcement, a further 19 European countries have joined the pilot, including the Netherlands, Sweden, Belgium, Ireland, Denmark, and the Czech Republic.
Hailing the announcement, Osborne said the initiative is now gaining the ‘international support’ that is making it ‘truly effective’ against tax-dodgers and financial wrongdoing.
“I welcome the early commitment made by Gibraltar, Isle of Man and Montserrat to participate and call on all of the remaining overseas territories and crown dependencies to do likewise.
“It should be clear to all countries and tax jurisdictions that the world is moving firmly in the direction of greater tax transparency and the UK will continue to push for an internationally agreed blacklist for those that refuse to do the right thing,” continued the chancellor.
Not falling in line
One tax haven that has yet to sign up to the initiative is Bermuda, with minister of finance Bob Richards stating he will ‘carefully monitor’ the initiative before the British island territory adopts it.
Richards, who said that Bermuda holds an “insignificance to the Panama Papers”, explained that once the initiative develops into an international standard, then “we will engage Bermuda’s long-established policy of adherence to all international… as evidenced by last week’s adoption of the OECD’s Country-by-Country reporting regime.”
Introduced in 2013 to encourage R&D investment, the scheme allows UK businesses to pay only 10% corporation tax on profits derived from any UK or certain EU patents
Signed into law by president Barack Obama in 2010, the Dodd-Frank legislation has tightened regulation of the US financial system
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