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MEPs Support Tough New Anti-Avoidance Regime

Thursday, July 7, 2016

Members of the European Parliament (MEPs) have backed proposals for a package of anti-avoidance measures that includes a tax haven blacklist, sanctions against "uncooperative jurisdictions," and an EU-wide withholding tax.

The recommendations were prepared by Parliament's Special Committee on Tax Rulings II (TAXE II), and were passed by 514 votes to 68, with 125 abstentions. TAXE II had previously voted in favor of the recommendations, by 25 to six, with nine abstentions.

The committee's report advocated the following:

  • A common EU "blacklist" of non-cooperative jurisdictions, as proposed by the European Commission, with a common definition of "uncooperative jurisdictions," and an escalation provision to allow for dialogue with jurisdictions prior to their inclusion on the list;
  • Sanctions against uncooperative jurisdictions, including the possibility to review and suspend free trade agreements and prohibit access to EU funds;
  • Sanctions for companies, banks, accountancy and law firms, and tax advisors proven to be involved in illegal, harmful, or wrongful activities with uncooperative jurisdictions;
  • Sanctions for company managers involved in tax evasion, and the power to revoke business licenses in cases where professionals are involved in illegal tax planning and evasion schemes;
  • A possible financial liability for tax advisors engaged in unlawful practices;
  • EU-wide legislation to prevent the abuse of patent box regimes;
  • Guidelines to better define permissible transfer pricing activities;
  • Better protection for whistle-blowers;
  • An Commission proposal before the end of 2016 for a common consolidated corporate tax base;
  • An EU-wide withholding tax, to be collected by member states, to ensure that profits made in the EU are taxed at least once before leaving it;
  • A code of conduct for banks, tax advisors, law- and accounting firms;
  • An EU Tax Policy Coherence and Coordination Centre to be created within the Commission; and
  • A global register of assets held by individuals, companies, and entities, such as trusts and foundations, to which tax authorities would have full access.

Rapporteur Michael Theurer, who co-authored the recommendations with Jeppe Kofod, said: "Tax dumping is done at the expense of the general public and small- and medium-sized companies, which are the backbone of our European economy. In a fair tax system, multinational companies also pay their share and they should do so where they add value and make their profit."

Kofod added: "With this report, Europe is stepping up to the plate on the fight against tax evasion and tax havens. We're setting clear demands for increased accountability, effective deterrents in the form of markedly increased sanctions for tax havens, banks, tax advisors, and companies, and we're calling for increased European and international cooperation on this hugely problematic issue."

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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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