Member States have joined the Chancellor’s call to tackle tax evasion, by agreeing to European-level action and by signing a joint statement pressing for much greater levels of automatic exchange of tax information internationally.
At a key European meeting EU finance ministers agreed the mandate for the European Commission to negotiate tax transparency agreements with third countries including Switzerland and Liechtenstein, which had been stalled for several years. This is a critical step towards agreeing the amended Savings Directive and therefore towards greater levels of automatic tax information exchange in the EU.
Furthermore, the UK signed a joint statement with 16 other EU Member States pressing for the development of a new global standard for automatic exchange of information to tackle tax evasion, based on the US FATCA legislation.
Belgium, the Czech Republic, Denmark, Finland, France, Germany, Ireland, Italy, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the UK all signed the statement.
The joint statement directly builds on the pilot automatic exchange of information announced by the European G5 (UK, France, Germany, Italy and Spain). As well as information about individuals’ accounts, this will involve the automatic sharing of information on certain accounts held by entities, such as trusts.
The Overseas Territories and the Isle of Man have also committed to early participation in this new standard and Guernsey has also expressed a strong interest. Jersey has yet to commit to the pilot
There is now real momentum building towards a step change in the international community’s approach to tackling offshore evasion which the government is fully committed to grasp and make a reality as soon as possible.
There is strong international consensus forming both in Europe and the G20 to put in place a new global standard on tax transparency, something the G7 also backed at their recent meeting.
Making this new standard a reality will be a key element to the G8 summit next month.