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US, UK, Australia To Provide Tax Information To Others

Tuesday, May 14, 2013

It has been announced that the tax administrations from the United States, Australia and the United Kingdom have developed a plan to share tax information involving trusts and companies holding assets on behalf of residents in jurisdictions worldwide.

The Internal Revenue Service (IRS), the Australian Taxation Office and HM Revenue & Customs (HMRC) are each said to have acquired a substantial amount of data revealing extensive use of such entities organized in a number of jurisdictions including Singapore, the British Virgin Islands, Cayman Islands and the Cook Islands. The data contains both the identities of the individual owners of these entities, as well as the advisors who assisted in establishing the entity structure.

The three tax offices have been working together to analyze this data and have uncovered information that may be relevant to tax administrations of other jurisdictions. Thus, they have developed a plan for sharing the data, as well as their preliminary analysis, if requested by those other tax administrations.

"This is part of a wider effort by the IRS and other tax administrations to pursue international tax evasion," said IRS Acting Commissioner Steven T. Miller. "Our cooperative work with the UK and Australia reflects a bigger goal of leaving no safe haven for people trying to illegally evade taxes."

While it was emphasized that there is nothing illegal about holding assets through offshore entities, it was noted that "such offshore arrangements can often be used to avoid or evade tax liabilities on income represented by the principal or on the income generated by the underlying assets." In addition, advisors may be subject to civil penalties or criminal prosecution for promoting such arrangements as a means to avoid or evade tax liability, or to circumvent information reporting requirements.

"These arrangements may be perfectly legitimate or may involve tax avoidance, evasion or other serious offences by taxpayers and we need to look closely at the information we now hold," Australian Tax Commissioner Chris Jordan added.

On its part, HMRC has confirmed that it has, so far, identified over 100 people who benefit from such offshore arrangements, and a number of those individuals had already been identified and are under investigation for offshore tax evasion. They have also identified more than 200 UK accountants, lawyers and other professional advisors who advise on setting up these structures who will also be scrutinized.

It is expected that this multilateral cooperation and coordinated effort will allow many countries to efficiently process this information and effectively enforce any laws that may have been broken. Increasingly, it was added, tax administrations are working together in this way to assist one another in identifying non-compliance with tax laws.

In fact, following the announcement by the three countries, the Ministry of Finance, in conjunction with the Inland Revenue Authority of Singapore (IRAS) and Monetary Authority of Singapore, confirmed that Singapore is fully committed to working with the tax authorities of Australia, UK and US in the investigation of structures that may be involved in wrongdoing.

It was added that, following the completion by those countries of their analysis of the data to determine if such structures have been used for any wrongdoing, Singapore will assist them to the fullest extent possible under its laws and tax agreements, which allow for the exchange of information, including banking and trust information.

The Singaporean authorities are also looking into whether any tax offences have been committed in Singapore. They have started requesting these tax authorities for the data of entities linked to Singapore to be shared with Singapore. As part of IRAS's ongoing programs, IRAS audits and conducts compliance investigations into entities that could be using offshore structures to conceal income and avoid being taxed in Singapore.

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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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