Governments sign deal against tax evasion 

Fifty-one countries have pledged to pass on financial data after signing an agreement in Berlin to crack down on tax evasion.

The transparency drive, which will launch the automatic exchange of tax information between countries, was hailed by finance ministers as a watershed in the battle against tax dodgers.
Wolfgang Schäuble, German finance minister, said: “We are creating more transparency and more fairness . . . tax evasion will no longer be worth it.”

George Osborne, UK chancellor, said tax evasion was a “scourge” that could only be tackled with a global solution.
Mr Osborne came under renewed pressure to modify the UK’s tax break for patent income at the Berlin meeting.

Mr Schäuble said he was confident that November’s G20 summit in Brisbane would produce an agreement on closing loopholes in “patent box” tax incentives, which offer a lower rate of tax on incomes from patents and licences.
Under the tax evasion agreement signed in Berlin, countries will facilitate the collection and exchange of information on bank accounts and the beneficial ownership of companies and other legal structures such as trusts.

Talks were triggered by pressure for transparency that started with US legislation, known as the Foreign Account Tax Compliance Act (Fatca), passed in 2010 after a scandal involving UBS, the Swiss bank.

Remaining offshore centres are expected to come under pressure to join in, although some offshore account holders are reported to have moved their money to the few centres, such as Panama, that have held back from the transparency drive.

The Tax Justice Network, a campaign group, said the Berlin deal was a “big first step” towards tackling illicit financial flows.

The OECD said a peer review process would ensure data was exchanged automatically. It added that governments had agreed to raise the standard of information that could be requested, by including a requirement that beneficial ownership of all legal entities be available to tax authorities and exchanged with treaty partners.

 

Source: FT- Governments sign deal against tax evasion

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