The EU Parliament’s PANA committee, set up to investigate maladministration involving money laundering, tax avoidance and evasion following the ‘Panama papers’, has presented its draft report. The report remains open to amendment until 5 September, but among the findings contained in the draft are that:
obscuring the identity of the ultimate beneficial owner is the main motivation for setting up entities in offshore jurisdictions and remains a key obstacle to stopping tax avoidance and evasion;
most of the offshore structures revealed in the Panama papers were set up from the UK, followed by Luxembourg and Cyprus, while 90% of the still-active entities are based in the British Virgin Islands, Panama and the Seychelles; and
trust and fiduciary companies, together with company service providers, formed the most important group demanding the creation of offshore entities by Mossack Fonseca, followed by accountants, tax advisers, lawyers and consultants, who were responsible for about one-third of the entities established.
The committee’s recommendations include:
agreeing a common international definition of what constitutes an offshore financial centre, tax haven, secrecy haven, non-cooperative tax jurisdiction and high risk country;
establishing a common EU blacklist of non-cooperative tax jurisdictions, with a zero or close to zero corporate tax rate among the criteria, and strong deterrent sanctions such as the suspension of third-country equivalence in the financial sector;
establishing publicly accessible beneficial ownership registers and an EU beneficial ownership register;
creating a global company register and a central register of bank accounts accessible to financial intelligence units and national law enforcement bodies; and
establishing binding international rules and standards to regulate the wealth management profession.
The report is also strongly critical of the ‘closed and secretive nature’ of the Council’s code of conduct group on business taxation, which the committee sees as a hindrance to the adoption of effective EU anti-tax evasion legislation. See http://bit.ly/2qrL9n8.
The EU Parliament’s PANA committee, set up to investigate maladministration involving money laundering, tax avoidance and evasion following the ‘Panama papers’, has presented its draft report. The report remains open to amendment until 5 September, but among the findings contained in the draft are that:
obscuring the identity of the ultimate beneficial owner is the main motivation for setting up entities in offshore jurisdictions and remains a key obstacle to stopping tax avoidance and evasion;
most of the offshore structures revealed in the Panama papers were set up from the UK, followed by Luxembourg and Cyprus, while 90% of the still-active entities are based in the British Virgin Islands, Panama and the Seychelles; and
trust and fiduciary companies, together with company service providers, formed the most important group demanding the creation of offshore entities by Mossack Fonseca, followed by accountants, tax advisers, lawyers and consultants, who were responsible for about one-third of the entities established.
The committee’s recommendations include:
agreeing a common international definition of what constitutes an offshore financial centre, tax haven, secrecy haven, non-cooperative tax jurisdiction and high risk country;
establishing a common EU blacklist of non-cooperative tax jurisdictions, with a zero or close to zero corporate tax rate among the criteria, and strong deterrent sanctions such as the suspension of third-country equivalence in the financial sector;
establishing publicly accessible beneficial ownership registers and an EU beneficial ownership register;
creating a global company register and a central register of bank accounts accessible to financial intelligence units and national law enforcement bodies; and
establishing binding international rules and standards to regulate the wealth management profession.
The report is also strongly critical of the ‘closed and secretive nature’ of the Council’s code of conduct group on business taxation, which the committee sees as a hindrance to the adoption of effective EU anti-tax evasion legislation. See http://bit.ly/2qrL9n8.
