As part of the Government’s efforts to agree concrete action to tackle tax evasion and aggressive tax avoidance during the G8, the Prime Minister has today written to the leaders of crown dependencies and overseas territories about their role in getting the UK house in order.
The letter has been sent to the leaders of:
- British Virgin Islands
- Cayman Islands
- Turks and Caicos Islands
- The Isle of Man
Prime Minister’s letter
As you know, I have made fighting the scourge of tax evasion and aggressive tax avoidance a priority for the G8 Summit which the UK is hosting next month. With one month to go, this is the critical moment to get our own houses in order. I am looking to all the Overseas Territories and Crown Dependencies to continue to work in partnership with the UK in taking the lead on two critical issues: tax information exchange and beneficial ownership.
Let me set out exactly why. I have said before that I want to see the Overseas Territories and Crown Dependencies flourish, and I respect your right to be lower tax jurisdictions. I believe passionately in lower taxes as a vital driver of growth and prosperity for all. But lower taxes are only sustainable if what is owed is actually paid - and if the rules to achieve this are set and enforced fairly to create a level playing field right across the world. There is no point in dealing with tax evasion in one country if the problem is simply displaced to another.
So I very much welcome the commitments you have made to automatic tax information exchange, both on a bilateral and multilateral basis, which will help us to reach our goal of setting a global standard in tax transparency. There is a critical mass building. Last week’s European Finance Ministers meeting showed that the EU is getting on board. And I hope others around the world will follow the lead we are setting together.
We also need to ensure information exchange works effectively for all, particularly the poorest countries in the world. That is why we strongly support the Multilateral Convention on Mutual Assistance in Tax Matters. I know many of you have been considering joining and I ask you all to commit to do so in the run-up to the G8 Summit.
But dealing with tax evasion is not just about exchanging information. It is also about improving the quality and accuracy of that information. Put simply, that means we need to know who really owns and controls each and every company. This goes right to the heart of the ambition of Britain’s G8 to knock down the walls of company secrecy.
Some of you have already led the way with public commitments to produce Action Plans on beneficial ownership - and I hope those who have yet to can do so as quickly as possible. Getting the right content in these plans will now be critical. These will need to provide for fully resourced and properly managed centralised registries, that are freely available to law enforcement and tax collectors, and contain full and accurate details on the true ownership and control of every company.
As we continue our negotiations over the coming weeks, I look forward to working with you to ensure we fully meet the spirit as well as the letter of the Financial Action Task Force standards on beneficial ownership. The UK is hosting a high level event on 15 June to showcase progress on tax, trade and transparency, and I hope you can join us on the day to showcase the progress you have made. This is a real opportunity to set the global standard on transparency - and I am confident the Overseas Territories and Crown Dependencies will rise to the challenge.
Read more about the UK’s agenda for the G8 summit: increasing trade, fairer taxes and greater transparency