G20 FINANCE MINISTERS have echoed calls made by the G8 at last month’s summit in Lough Erne to introduce a global, automatic tax information exchange system as the international community looks to combat tax evasion and avoidance.
Meeting at their summit in Moscow, the finance ministers and central bank governors endorsed the 15-point action plan put to them by the OECD, in particular stating a “truly global model for multilateral and bilateral automatic exchange of information” is required to clamp down on tax avoidance and evasion.
The UK already operates such systems with all its overseas territories with significant financial centres. The deals see the UK, along with other countries involved in the pilot, automatically provided with much greater levels of information about bank accounts held by their taxpayers in those jurisdictions, including names, addresses, dates of birth, account numbers, account balances and details of payments made into those accounts.
It also includes information on certain accounts held by entities, such as trusts.
Under the terms of those deals, UK residents with assets concealed on the islands will have until September 2016 to disclose details to the taxman and pay any tax owed to the HMRC, as well as a fine between 10% and 20% of the amount owed.
While in most cases, the deal will see evaders escape prosecution, HMRC offers no guarantees.
Unlike a similar deal with Switzerland, anonymity is not enshrined, while the deals will not have the immunity from criminal prosecution seen in the Liechtenstein Disclosure Facility. The UK received its first payment from Switzerland, amounting to £340m in January.
In a communiqué released by the G20, the group called on the implementation of the system universally “without further delay”, adding that countries requiring support in doing so will receive just that.
The statement read: “We call on all jurisdictions to commit to implement this standard. We are committed to making automatic exchange of information attainable by all countries, including low-income countries, and will seek to provide capacity building support for them. We call on all countries to join the Multilateral convention on mutual administrative assistance in tax matters without further delay. We look forward to the practical and full implementation of the new standard on a global scale.”
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