The UK government is coming under increasing pressure to take steps to impose tax transparency in its overseas territories, while the premier of the British Virgin Islands has announced that BVI authorities are investigating how private information was ‘illicitly obtained and used to attack the BVI financial services industry’.
Save the Children has asked the chancellor to host a ‘tax haven summit’ before the G8 leaders meet in June, and Austria’s finance minister Maria Fekter has said the EU ‘cannot force Austria to reform its controversial banking secrecy laws without also forcing the UK to crack down on tax havens in its jurisdiction’.
The Guardian reported today that Fekter told Austria's Kurier newspaper: ‘We want a trust registry for the Channel Islands, but also for countries where British law applies such as the Cayman Islands, Virgin Islands or Gibraltar. These are all areas that are havens for tax refugees.’
In another interview with Austria's Die Presse, Fekter said the UK should be forced to ban anonymous directorships of companies and trusts, the report added.
‘Inaccurate’ stories
BVI premier Orlando Smith said many of the news stories based on data leaked to the Washington-based International Consortium of Investigative Journalists (ICIJ) were inaccurate. The BVI is a British overseas territory and the Queen, its head of state, is represented by the governor, Boyd McCleary.
One corporate service provider’s website says: ‘It is not a secret that the BVI is extremely popular as an offshore haven offering outstanding tax benefits to non-residents. The BVI is among those fifty countries in the world which are admitted as offshore centres; moreover, it is considered to be the most popular tax haven, along with such jurisdictions as Panama and Seychelles.’
The Guardian reported on Monday that David Cameron and George Osborne have been warned that ‘they are in danger of losing credibility on their central agenda for their G8 chairmanship this year if they do not unilaterally introduce greater tax transparency in British dependent territories such as the British Virgin Islands’.
It added: ‘In a letter to Osborne on Sunday, the leading aid charity Save the Children told the chancellor he has the powers to impose tax transparency on the British Virgin Islands … Save the Children chief executive Justin Forsyth urged the government to "consider hosting a meeting of crown dependencies and overseas territories ahead of the G8 to encourage these jurisdictions to implement the new gold standard of beneficial ownership transparency in their own interests”.’
David McNair, Save the Children’s head of growth and livelihoods, said: ‘Tax havens and their lax rules around who owns a company or bank account are a dream come true for criminals and unscrupulous organisations that want to hide their paydays from dodgy deals from the authorities.’
Writing on the Save the Children website, McNair added: ‘The ideal scenario for those so inclined is to use a bank account that no one can link to them as the true “beneficial” owner. The uncomfortable truth is that many G8 countries, and many UK-linked tax havens, such as the British Virgin Islands, allow for this kind of murky behaviour.’
‘Principles’
Orlando Smith said in a statement on the BVI London office website: ‘The BVI financial services industry was built over several decades on key principles of integrity, vigilance, accountability and transparency; and in keeping with all relevant international standards. This has led to the international community having full confidence in our jurisdiction, thus the frequent use of BVI companies for a myriad of business transactions.’
He added: ‘The BVI is not a secrecy jurisdiction. As a member of OECD Global Forum, we have signed 22 tax information exchange agreements and continue to negotiate with more than 10 other countries. In addition, the BVI shares information when legitimate requests are made by the relevant treaty partners.’
Critics have argued that tax information exchange agreements are ineffective in tackling tax evasion, and recent developments have signalled a move towards multilateral agreements for the automatic exchange of information.
However, Smith said the BVI had recently announced its commitment to concluding Foreign Account Tax Compliance Act (FATCA) negotiations with the US Treasury, and entering into a similar arrangement with the UK government.
The Financial Times quoted Elise Donovan, executive director of the BVI International Finance Centre, as saying that the leak was widely viewed within the BVI as a violation of privacy rights. Clients had expressed concerns, but there were no reports of anyone stopping doing business with the BVI, she said.
The UK government is coming under increasing pressure to take steps to impose tax transparency in its overseas territories, while the premier of the British Virgin Islands has announced that BVI authorities are investigating how private information was ‘illicitly obtained and used to attack the BVI financial services industry’.
Save the Children has asked the chancellor to host a ‘tax haven summit’ before the G8 leaders meet in June, and Austria’s finance minister Maria Fekter has said the EU ‘cannot force Austria to reform its controversial banking secrecy laws without also forcing the UK to crack down on tax havens in its jurisdiction’.
The Guardian reported today that Fekter told Austria's Kurier newspaper: ‘We want a trust registry for the Channel Islands, but also for countries where British law applies such as the Cayman Islands, Virgin Islands or Gibraltar. These are all areas that are havens for tax refugees.’
In another interview with Austria's Die Presse, Fekter said the UK should be forced to ban anonymous directorships of companies and trusts, the report added.
‘Inaccurate’ stories
BVI premier Orlando Smith said many of the news stories based on data leaked to the Washington-based International Consortium of Investigative Journalists (ICIJ) were inaccurate. The BVI is a British overseas territory and the Queen, its head of state, is represented by the governor, Boyd McCleary.
One corporate service provider’s website says: ‘It is not a secret that the BVI is extremely popular as an offshore haven offering outstanding tax benefits to non-residents. The BVI is among those fifty countries in the world which are admitted as offshore centres; moreover, it is considered to be the most popular tax haven, along with such jurisdictions as Panama and Seychelles.’
The Guardian reported on Monday that David Cameron and George Osborne have been warned that ‘they are in danger of losing credibility on their central agenda for their G8 chairmanship this year if they do not unilaterally introduce greater tax transparency in British dependent territories such as the British Virgin Islands’.
It added: ‘In a letter to Osborne on Sunday, the leading aid charity Save the Children told the chancellor he has the powers to impose tax transparency on the British Virgin Islands … Save the Children chief executive Justin Forsyth urged the government to "consider hosting a meeting of crown dependencies and overseas territories ahead of the G8 to encourage these jurisdictions to implement the new gold standard of beneficial ownership transparency in their own interests”.’
David McNair, Save the Children’s head of growth and livelihoods, said: ‘Tax havens and their lax rules around who owns a company or bank account are a dream come true for criminals and unscrupulous organisations that want to hide their paydays from dodgy deals from the authorities.’
Writing on the Save the Children website, McNair added: ‘The ideal scenario for those so inclined is to use a bank account that no one can link to them as the true “beneficial” owner. The uncomfortable truth is that many G8 countries, and many UK-linked tax havens, such as the British Virgin Islands, allow for this kind of murky behaviour.’
‘Principles’
Orlando Smith said in a statement on the BVI London office website: ‘The BVI financial services industry was built over several decades on key principles of integrity, vigilance, accountability and transparency; and in keeping with all relevant international standards. This has led to the international community having full confidence in our jurisdiction, thus the frequent use of BVI companies for a myriad of business transactions.’
He added: ‘The BVI is not a secrecy jurisdiction. As a member of OECD Global Forum, we have signed 22 tax information exchange agreements and continue to negotiate with more than 10 other countries. In addition, the BVI shares information when legitimate requests are made by the relevant treaty partners.’
Critics have argued that tax information exchange agreements are ineffective in tackling tax evasion, and recent developments have signalled a move towards multilateral agreements for the automatic exchange of information.
However, Smith said the BVI had recently announced its commitment to concluding Foreign Account Tax Compliance Act (FATCA) negotiations with the US Treasury, and entering into a similar arrangement with the UK government.
The Financial Times quoted Elise Donovan, executive director of the BVI International Finance Centre, as saying that the leak was widely viewed within the BVI as a violation of privacy rights. Clients had expressed concerns, but there were no reports of anyone stopping doing business with the BVI, she said.
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