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G5 To Develop And Pilot Multinational Tax Info Exchange

Friday, April 12, 2013

The UK, France, Germany, Italy, and Spain have agreed to develop and pilot a major new multilateral tax information exchange program, intended to tackle international tax evasion in a way that minimizes costs for both businesses and governments.

The initiative is outlined in a joint letter to the European Union's (EU's) Tax Commissioner Algirdas Šemeta, signed by the G5's finance ministers. In it, the ministers point to the anti-evasion agendas of both the European Union and the US as key steps forward. In December, Šemeta tabled an Action Plan containing two recommendations designed to foster a stronger EU stance against so-called tax havens and combat aggressive tax planning. The US's Foreign Account Tax Compliance Act (FATCA) legislation is intended to ensure that the Internal Revenue Service (IRS) obtains information on financial accounts held by US taxpayers with foreign financial institutions (FFIs). The Commission supported the G5 in discussions with the US Government on a possible intergovernmental approach to FATCA. A model agreement was developed and published last July.

It is on this model that the pilot will be based. Once it is up and running, a wide range of financial information will be automatically exchanged between the G5. According to the letter, the aim of the pilot is that it "will not only help in catching and deterring tax evaders but will also provide a template as to the wider multilateral agreement we hope to see in due course." Other EU member states will be invited to join the scheme, with the "hope that Europe can take a lead in promoting a global system of automatic information exchange, removing the hiding places for those who would seek to evade paying their taxes."

Commenting on the news, Sophie Dworetzsky, wealth planning partner at Withers, said: "For UK taxpayers this makes good the promise set out in the Budget two weeks ago, when HM Revenue and Customs (HMRC) promised to crack down ever harder on offshore evasion, which it estimates costs it up to GBP4bn (USD6.1bn) a year in lost revenues. How accurate this is is anyone's guess, but certainly taxpayers can assume that anything other than full compliance is now no longer an option. No doubt HMRC will also make good use of this information through their powerful new joined up technology."

Dworetzsky did nonetheless sound a note of caution: "Let's hope that the fully compliant are not subjected to fishing expedition type investigations simply because they hold, for entirely legitimate reasons, accounts or other structures outside the UK. It is important to remember that simply having money and or trusts etc. offshore often has nothing to do with tax and everything to do with family succession and preferable legal systems."

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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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