Tax Havens and Tax Transparency
Following from the Panama papers leak a number of EU countries and British crown dependencies (tax havens) have agreed to adopt a call for international tax transparency in an attempt to crackdown on tax evasion. Germany, France, Italy, Spain and the UK are part of this tax information sharing initiative.Tax havens to join the five EU countries include, Gibraltar, Isle of Man and Montserrat, this means that tax enforcement authorities in these jurisdictions will share information on the company beneficial ownership registers.
Further to David Cameron’s involvement with Blairmore holdings sharing of information will also extend to registers of trusts, but only to new trust registrations.The arrangement is essentially a pilot project which looks at creating a global common standard of information sharing and since Osbourne made his announcements a number of other countries have joined in, including Netherlands, Sweden, Belgium, Ireland, Denmark, and the Czech Republic.
Bermuda however has not signed up to this pilot project saying that it will sign up once a global common standard has been achieved, it also claims that it is insignificant compared to Panama, it did say however that it will continue comply with all international law’s and the OECD’s tax reporting agreement, you can read further on the OECD’s tax reporting agreement via this link OECD tax reporting agreement
Opinion – it remains to be seen how this European initiative will affect the Multi-National Companies, particularly in light of the TTIP treaty between the EU and USA. More information about TTIP can be found here TTIP article. But certainly it will affect anyone who is hiding ill-gotten gains. The interaction between this European initiative and the UK anti avoidance legislation is also unclear, we anticipate that HMRC are likely to challenge companies and tax payers in some form.