Overseas Territories and Crown Dependencies announce commitments to tackle tax evasion and enhance transparency
Chancellor of the Exchequer George Osborne has strongly welcomed news that all British Overseas Territories with significant financial centres have signed up to the government’s strategy on global tax transparency, marking a turning point in the fight against tax evasion and illicit finance.
Following the recent leadership shown by the Cayman Islands, the other Overseas Territories – Anguilla, Bermuda, the British Virgin Islands, Montserrat and the Turks and Caicos Islands – have agreed to much greater levels of transparency of accounts held in those jurisdictions.
Gibraltar, which already operates the relevant transparency directives as part of the EU, has also made the same commitments.
They have agreed to pilot the automatic exchange of information bilaterally with the UK and multilaterally with the G5 – the UK, France, Germany, Italy and Spain.
Under this agreement much greater levels of information about bank accounts will be exchanged on a multilateral basis as part of a move to a new global standard.
The agreement will mean that the UK, along with other countries involved in the pilot, will be automatically provided with much greater levels of information about bank accounts held by their taxpayers in these jurisdictions. This includes names, addresses, dates of birth, account numbers, account balances and details of payments made into those accounts.
This also includes information on certain accounts held by entities, such as trusts.
The Isle of Man – the first non-US jurisdiction to agree to greater exchange of information with the UK – has also agreed to join the multilateral initiative. Guernsey too has also expressed a strong interest in engaging with the pilot.
These jurisdictions have, as well as this, committed to taking action to ensure they are at the forefront of transparency on company ownership.
The government is working closely with them ahead of the UK’s presidency of the G8. Earlier this year Prime Minister David Cameron identified tax transparency as a key priority for the summit.
This represents a step change in the level of international transparency and will make it much harder for people to escape paying taxes by hiding their money overseas.
George Osborne has urged others to join this growing initiative. He said: “This represents a significant step forward in tackling illicit finance and sets the global standard in the fight against tax evasion.
“I now hope others follow these governments’ lead and enter into similar commitments to this new level of transparency, removing the hiding places for those who seek to evade tax and hide their assets.”
The agreements build on those the UK reached with the Isle of Man, Guernsey and Jersey to exchange tax information automatically based on our groundbreaking automatic information exchange agreement with the US to implement the US FATCA law to tackle tax evasion.
The government sees this as setting a new standard in international tax transparency.
Timeline of events
|June 2012||The UK, France, Germany, Italy and Spain (the G5) agree a model information exchange agreement with the US to implement FATCA, setting a new standard in the fight against tax evasion|
|September 2012||The UK and US are the first to sign an agreement based on the G5 Model|
|January 2013||The Prime Minister sets out his priorities for the UK’s presidency of the G8, which includes tax transparency|
|February 2013||The Isle of Man agrees to greater automatic information exchange with the UK|
|March 2013||Jersey and Guernsey agree to greater automatic information exchange with the UK|
|April 2013||France, Germany, Italy, Spain and the UK (the G5) agree to develop and pilot multilateral tax information exchange based on our agreements with the US|
|April 2013||The Prime Minister sets out his priorities for the May European Council, which includes tax transparency, in a letter to the President of the European Council|
|May 2013||The Overseas Territories agree to greater automatic information exchange with the UK and, along with the Isle of Man, agree to join the G5 pilot|