A wide range of financial information is to be exchanged automatically between the UK and France, Germany, Italy and Spain after the G5 countries agreed to work on a pilot multilateral information exchange facility, using the model agreed with the US last year.
‘This pilot will not only help in catching and deterring tax evaders but it will also provide a template as to the wider multilateral agreement we hope to see in due course,’ G5 finance ministers said in a letter to the EU tax commissioner Algirdas Šemeta.
The pilot will be based on the model inter-governmental agreement to improve international tax compliance and to implement FATCA, developed between the G5 and the US. The model IGA also formed the basis of a UK-US bilateral automatic exchange agreement.
‘This will help ensure that international tax evasion is tackled in a way that minimises costs for both businesses and governments,’ the Treasury said yesterday.
David Gauke, the exchequer secretary, said: ‘This is an important further step in the fight against tax evasion and represents the next stage in promoting a new standard in the automatic exchange of information. This builds on the agreements we have reached with the Isle of Man, Guernsey and Jersey and the discussions currently underway with the [British] overseas territories.’
Deloitte welcomed the announcement. Tax partner John Cullinane said: ‘In the current economic environment it is more important than ever that taxes legally due should be collected. This requires a co-ordinated international approach and Deloitte welcomes this further significant step in that direction by the UK and four other leading European countries.’
‘Urgency’
David Cameron said in January that the UK government would use its presidency of the G8 to push for greater transparency, ‘shining a light on company ownership, land ownership and where money flows from and to’. But critics have questioned the UK’s commitment to tackle evasion via tax havens with constitutional links to the UK.
As Tax Journal reported yesterday, the names of the owners of thousands of offshore companies and trusts have been revealed following the leak of two million emails and other documents, mainly from the British Virgin Islands.
Algirdas Šemeta said in a statement on Monday: ‘Recent developments, fuelled by the outcome of the Offshore Leaks, confirms the urgency for more and better action against tax evasion. The [European] Commission has long advocated more transparency and stronger common tools to fight fraudsters, discourage evaders and ensure fair burden-sharing in taxes.
‘Indeed we put a comprehensive package of measures on the table last December to achieve this, and have been working closely with international partners for stricter and more effective international standards. We know what is needed to better fight against fraud and evasion. We need automatic exchange of information to be widely applied, as this is the most effective way of allowing countries to collect the taxes they are due.’
He added: ‘We need a tough common stance against tax havens, including sanctions against those who facilitate evaders. And we need to block off the pathways to aggressive tax planning and close opportunities for abusive tax practices. All the tools to achieve these goals are on the table, ready to be seized.
‘I am very pleased to see that, over the past few days, many of the member states have reviewed where they stand on these issues and intensified their political will to act. Now it is time to put words into action. I hope to see rapid adoption of our proposals for a stronger EU stance against tax fraud and evasion.'
A wide range of financial information is to be exchanged automatically between the UK and France, Germany, Italy and Spain after the G5 countries agreed to work on a pilot multilateral information exchange facility, using the model agreed with the US last year.
‘This pilot will not only help in catching and deterring tax evaders but it will also provide a template as to the wider multilateral agreement we hope to see in due course,’ G5 finance ministers said in a letter to the EU tax commissioner Algirdas Šemeta.
The pilot will be based on the model inter-governmental agreement to improve international tax compliance and to implement FATCA, developed between the G5 and the US. The model IGA also formed the basis of a UK-US bilateral automatic exchange agreement.
‘This will help ensure that international tax evasion is tackled in a way that minimises costs for both businesses and governments,’ the Treasury said yesterday.
David Gauke, the exchequer secretary, said: ‘This is an important further step in the fight against tax evasion and represents the next stage in promoting a new standard in the automatic exchange of information. This builds on the agreements we have reached with the Isle of Man, Guernsey and Jersey and the discussions currently underway with the [British] overseas territories.’
Deloitte welcomed the announcement. Tax partner John Cullinane said: ‘In the current economic environment it is more important than ever that taxes legally due should be collected. This requires a co-ordinated international approach and Deloitte welcomes this further significant step in that direction by the UK and four other leading European countries.’
‘Urgency’
David Cameron said in January that the UK government would use its presidency of the G8 to push for greater transparency, ‘shining a light on company ownership, land ownership and where money flows from and to’. But critics have questioned the UK’s commitment to tackle evasion via tax havens with constitutional links to the UK.
As Tax Journal reported yesterday, the names of the owners of thousands of offshore companies and trusts have been revealed following the leak of two million emails and other documents, mainly from the British Virgin Islands.
Algirdas Šemeta said in a statement on Monday: ‘Recent developments, fuelled by the outcome of the Offshore Leaks, confirms the urgency for more and better action against tax evasion. The [European] Commission has long advocated more transparency and stronger common tools to fight fraudsters, discourage evaders and ensure fair burden-sharing in taxes.
‘Indeed we put a comprehensive package of measures on the table last December to achieve this, and have been working closely with international partners for stricter and more effective international standards. We know what is needed to better fight against fraud and evasion. We need automatic exchange of information to be widely applied, as this is the most effective way of allowing countries to collect the taxes they are due.’
He added: ‘We need a tough common stance against tax havens, including sanctions against those who facilitate evaders. And we need to block off the pathways to aggressive tax planning and close opportunities for abusive tax practices. All the tools to achieve these goals are on the table, ready to be seized.
‘I am very pleased to see that, over the past few days, many of the member states have reviewed where they stand on these issues and intensified their political will to act. Now it is time to put words into action. I hope to see rapid adoption of our proposals for a stronger EU stance against tax fraud and evasion.'
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