The UK Government has today agreed with France, Germany, Italy and Spain to develop and pilot a “multilateral tax information exchange”: meaning a wide range of financial information will be automatically exchanged between 5 countries. According to the UK Treasury the aim is to “catch and deter tax evaders and provide a template for wider multilateral automatic tax information exchange”. That is, they hope to start getting information from all the other EU countries in the near future.
This pilot will be based on the Model Intergovernmental Agreement to Improve International Tax Compliance and to Implement Foreign Account Tax Compliant Act (FATCA) developed between these 5 countries and the USA. The UK Treasury wants to “ensure that international tax evasion is tackled in a way that minimises costs for both businesses and governments”.
Exchequer Secretary to the Treasury, David Gauke 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 tax information. This builds on the agreements we have reached with the Isle of Man, Guernsey and Jersey and the discussions currently underway with the Overseas Territories.”
Algirdas Semeta, the European commissioner with responsibility for taxation, declared this as “a tough common stance against tax havens, including sanctions against those who facilitate evaders, to block off the pathways to aggressive tax planning and close opportunities for abusive tax practices”.
The Prime Minister wants to use the UK’s presidency of the G8 to explore options for greater global co-operation to “clamp down on tax fraud”.
FATCA is an American initiative to combat tax evasion by people using offshore bank accounts. It includes provisions on withholding taxes and on the reporting of information by foreign financial institutions. The UK and the USA subsequently signed the UK-US Agreement to Improve International Tax Compliance and to Implement FATCA in September 2012.
The Isle of Man, and the Channel Islands of Guernsey and Jersey have agreed to enter into automatic tax information exchange agreements with the UK. The British Government is in similar discussions with the Overseas Territories: Anguilla; Bermuda; British Antarctic Territory; British Indian Ocean Territory; British Virgin Islands; Cayman Islands; Falkland Islands; Gibraltar; Montserrat; Pitcairn, Henderson, Ducie and Oeno Islands; St Helena and the St Helena Dependencies (i.e. Ascension and Tristan da Cunha); South Georgia and South Sandwich Islands; the Sovereign Base Areas of Akrotiri and Dhekelia; and The Turks & Caicos Islands.
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