UK also signs agreements with overseas territories as significant progress is made towards new global standard.
Following the meeting of the Global Forum on Tax Transparency in Jakarta last week, Luxembourg, Liechtenstein, Colombia, Greece, Iceland and Malta have agreed to automatically share information on UK taxpayers with HM Revenue & Customs through the G5’s pilot initiative launched by the G5 on automatic exchange of tax information.
Initially announced in April by the G5 countries of the UK, France, Germany, Spain and Italy, the multi-lateral information sharing pilot will see tax information automatically shared between the participating jurisdictions.
37 jurisdictions have now signed up to the pilot, signalling a step change in the UK’s and the international community’s ability to clamp down on those hiding assets offshore to evade tax and builds on the progress made towards a new global standard in the automatic exchange of tax information.
This represents a significant step forward in the fight against international tax evasion and will reduce the hiding places for those who seek to evade tax.
In committing to the initiative, these jurisdictions recognise that the financial centres which will prosper in the future will be those which embrace tax transparency, and work cooperatively to tackle tax evasion.
Chancellor of the Exchequer, George Osborne, said:
This government has been leading the way in pushing for greater tax transparency and information sharing, putting it at the heart of our G8 agenda – the commitments made today demonstrate the considerable and rapid progress that has been made.
We have also made significant investment in HMRC’s anti-avoidance and evasion work to ensure that people pay the tax they owe.
Tax information sharing will provide HMRC with vital information in the fight against evasion as we continue to clamp down on individuals seeking to hide their assets offshore.
The government will continue to lead the way in working towards a new global standard and will look to conclude further agreements. At the G8 summit which the UK chaired in July 2013, the world leaders agreed on coordinated action to combat tax evasion and avoidance.
The announcement comes as the UK concludes the signings of tax agreements with the Overseas Territories of Bermuda, the British Virgin Islands, Gibraltar, Montserrat and the Turks and Caicos Islands, following the earlier agreements concluded with the Isle of Man, Guernsey, Jersey and the Cayman Islands.
Information on UK taxpayers will be shared with HMRC from 2016 and this data will be used to identify and locate tax evaders, who will face strong penalties. A number of disclosure facilities are in operation until this time, giving taxpayers an opportunity to settle their affairs before their information will be automatically shared.
As well as signing agreements with the UK, the Crown Dependencies and Overseas Territories have agreed to be part of the G5 multi-lateral information sharing pilot.
The finance ministers of France, Germany, Italy, Spain and the UK said in a joint statement:
We very much welcome the announcement by Colombia, Greece, Iceland, Liechtenstein, Luxembourg and Malta to join the pilot initiative launched by the G5 on automatic exchange of tax information.
The new global standard, to be finalised early next year, will mark a step change in our ability to clamp down on tax evasion. In making this commitment and joining the large number of jurisdictions that have committed to date, Colombia, Greece, Iceland, Liechtenstein, Luxembourg and Malta have recognised that those jurisdictions which will prosper in the future will be those which embrace tax transparency and work cooperatively to tackle tax evasion.
In accordance with their announcement, we look forward to working with Colombia, Greece, Iceland, Liechtenstein, Luxembourg and Malta, notably to seize forthcoming opportunities and actively foster automatic exchange of tax information in all organizations and bodies.
We reiterate our invitation to all countries to likewise commit to early adoption of the new global standard.