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European Commission Announces New Anti-Avoidance Measures

Wednesday, July 6, 2016

In response to the publication of the Panama Papers, the European Commission has proposed new measures to improve transparency and better facilitate the exchange of information between tax authorities.

Tax Commissioner Pierre Moscovici said: "The recent leaks exposed loopholes that still allow tax evaders to hide funds offshore. These loopholes must be closed and our measures to stamp out tax abuse must be intensified. The Commission is determined to inject more openness and more trust into taxation. We have already come a long way and now is the time to go further. The EU's tax transparency campaign continues."

He explained that there are three strands to the Commission's plan to crack down on aggressive tax avoidance. They are: providing tax authorities with "crucial information on the individuals behind any company or trust"; creating "more transparency around the activities of tax advisors, and more scrutiny of those that promote aggressive tax planning schemes"; and taking "a tougher stance against countries that allow offshore funds to be used for illicit purposes."

The Commission's priorities are set out in a Communication issued on July 5. It proposed:

  • That the Directive on Administrative Cooperation in the field of taxation be amended to give tax authorities access to national anti-money laundering information, particularly beneficial ownership and due diligence information;
  • That the Anti-Money Laundering Directive be amended to subject existing, as well as new accounts, to due diligence controls, and to subject passive companies and trusts to greater scrutiny and tighter rules;
  • That the Commission examine how EU member states could automatically exchange their national information on beneficial owners of companies and trusts with a potential tax impact;
  • That the Commission examine how to shed more light on tax advisors' activities and create effective disincentives for those who promote and enable aggressive tax planning;
  • That the Commission work with the European Council's Code of Conduct Group on establishing a list of uncooperative tax jurisdictions, by identifying the most relevant countries to screen under the compilation process, with a view to having the first list ready in 2017; and
  • That the Commission assess the need for new measures to increase protection for whistleblowers, in addition to the protections already in place in sectorial legislation, such as that on market abuse.

Vice-President Valdis Dombrovskis, responsible for the Euro and Social Dialogue, said: "Tax avoidance can cost the public purse many millions of euros each year. Understandably, people and businesses want tax to be fairer and more effective. To do so, we are working together at European level to make the system more transparent, making it difficult for potential tax evaders to move profits elsewhere. The Panama Papers scandal helped to focus minds and speed up this work."

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The Report

Offshore Trusts Guide: Introduction

The History of Offshore Trusts
Development of Professional Competence in the Jurisdictions
What Future for the Trust?
The New Age of Transparency
The Swiss Association of Trust Companies
The Society of Trusts and Estates Practitioners

Offshore Trusts Guide: Jurisdictions

Bahamas

Bahamas: Legal Framework and Formation Rules and Fees
Bahamas: 2006 Private Trust Companies Legislation

Barbados

Barbados: Legal Framework and Formation Rules and Fees
Barbados: Supervisory and Licensing Regime and Fees

Bermuda

Bermuda: Legal Framework and Formation Rules and Fees
Bermuda: Supervisory and Licensing Regime and Fees

British Virgin Islands

British Virgin Islands: Legal Framework and Formation Rules and Fees
British Virgin Islands: Special Trusts Act 2003
British Virgin Islands: The Trustee Act 2003
British Virgin Islands: :Supervisory and Licensing Regime and Fees
British Virgin Islands: New Laws on Private Trust Companies
British Virgin Islands: New Private Trust Company Regulations

Cayman Islands

Cayman Islands: Legal Framework and Formation Rules and Fees
Cayman Islands: Supervisory and Licensing Regime and Fees

Cook Islands

Cook Islands: Legal Framework and Formation Rules and Fees
Cook Islands: Supervisory and Licensing Regime and Fees

Cyprus

Cyprus: Legal Framework and Formation Rules and Fees
Cyprus: Supervision, Licensing and Tax

Gibraltar

Gibraltar: Legal Framework and Formation Rules and Fees
Gibraltar: Legislation, Regulation and Supervision

Guernsey

Guernsey: Legal Framework and Formation Rules and Fees
Guernsey: Trusts Law 2007

Isle of Man

Isle of Man: Legal Framework and Formation Rules and Fees
Isle of Man: Supervisory and Licensing Regime
Isle of Man: Uses Clients and Tax Treatment

Jersey

Jersey: Legal Framework and Formation Rules and Fees
Jersey: Supervisory and Licensing Regime
Jersey: Trusts Amendment Act 2006
Jersey: Foundations

Liechtenstein

Liechtenstein: Legal Framework and Formation Rules and Fees
Liechtenstein: Regulation Supervision and Transparency
Liechtenstein: Characteristics of Liechtenstein Trusts
Liechtenstein: Foundations

Madeira

Madeira: Legal Framework and Formation Rules and Fees

Malta

Malta: Legal Framework and Formation Rules and Fees
Malta: The Trust and Trustees Act 2004

Mauritius

Mauritius: Legal Framework and Formation Rules and Fees
Mauritius: Characteristics of the 2001 Trusts Act
Mauritius: Additional Provisions of the 2001 Trusts Act
Mauritius: Tax Treatment

Monaco

Monaco: Legal Framework and Formation Rules and Fees

Nevis

Nevis: Legal Framework and Formation Rules and Fees

Panama

Panama: Legal Framework and Formation Rules and Fees
Panama: Requirements for Acting as Trust Company in Panama

Seychelles

Seychelles: Legal Framework and Formation Rules and Fees

Turks & Caicos

Turks & Caicos: Legal Framework and Formation Rules and Fees
Turks & Caicos: The Voidable Dispositions Ordinance

Vanuatu

Vanuatu Legal Framework and Formation Rules and Fees




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