UK and four EU allies agree tax info sharing deal
The UK, Germany, France, Spain and Italy have agreed on a deal that it’s being claimed will lead to the automatic sharing of information about the beneficial owners of so-called shell companies and trusts within their borders.
The deal, announced in Washington on Thursday, in response to the Panama Papers leak earlier this month, was hailed by UK chancellor George Osborne as a “hammer blow against those that would illegally evade taxes and hide their wealth in the dark corners of the financial system”.
The announcement came during the International Monetary Fund’s spring meeting, which begins today and runs through Sunday.
The new transparency rules will come into force in January 2017, according to reports.
“Strong words of condemnation are not enough, populist outrage doesn’t by itself collect a single extra pound or dollar in tax or put a single criminal in jail,” Osborne added.
“What we need is international action now, and that’s precisely what we are doing today with real concrete action in the war against tax evasion.”
However, some critics, including Richard Murphy, director of Tax Research UK, say it won’t end tax evasion as promised.
Murphy, a long-time campaigner against tax evasion, said he welcomed the agreement, such as it was, saying it was “a step in the right direction”, but he stressed that the UK in particular was still a long way from being able to deliver the promised information.
“It’s especially important that Germany has signed on,” Murphy told a BBC interviewer on Friday. “They’ve had a long term reservation about this, because of what happened in the 1930s in Germany, so this is a big cultural change for them.
“The big problem is that, quite simply, the UK is not collecting this information from its own tax havens, and I don’t believe it’s going to.
“Guernsey and Anguilla have this week not signed up to [a separate information exchange deal with the UK, involving the UK’s overseas territories and Crown Dependencies], which itself is very hollow.
“And the UK is ‘offshore’ to Germany, France, Spain and Italy, and we will not have the information to share in the UK.
“Four hundred thousand companies a year in the UK do not supply any information on their ownership at all to Companies House, and almost none of them are prosecuted.
“So to suggest that we can can share data with these other countries is, at this point in time, quite ridiculous, until we get our house in order, this is a hollow promise.”
Guernsey ‘supports’ register plan
Guernsey minister for Treasury & Resources Gavin St Pier said that Guernsey in fact “welcome[d]” the beneficial ownership information sharing initiatives set out by the UK prime minister, “as we have the same outcomes in mind”. And he noted that Guernsey’s chief minister set out in a letter to David Cameron last week that the UK’s agenda on the matter “has Guernsey’s full, unqualified and active support”.
“As also set out in that letter, Guernsey is committed to putting in place a secure, consolidated and locally-accessed register with a designated point of contact, and the provisions in place for timely and reciprocal information exchange between Guernsey and UK law enforcement authorities,” St Pier said.
“We support the UK’s initiative to put in place global standards, and are pleased that we are moving with the UK and other jurisdictions in that direction.”
As reported, more than 11.5 million confidential documents were passed by an as-yet-unidentified source to Germany’s Süddeutsche Zeitung Zeitung newspaper, which then shared them with the US-based International Consortium of Investigative Journalists. The ICIJ in turn passed them on to some 107 media organisations, including the BBC’s Panorama TV show and the UK’s Guardian newspaper, in 78 countries around the world, which began reporting on their contents on 3 April.