Finance Ministers Urge Greater Information Sharing to Fight Tax Evasion
14 Aprile 2016 - 10:40PM
Dow Jones News
European finance ministers on Thursday urged their counterparts
in the Group of 20 advanced economies to share more information
about the owners of offshore companies and trusts, marking another
step in a global effort to clamp down on tax dodging.
The initiative comes as authorities world-wide are struggling to
contain the fallout from the leak of thousands of private documents
from a Panamanian law firm that specialized in offshore tax deals
for wealthy international clients.
In a letter to the G-20 released by the U.K. Treasury, the
finance ministers of France, Germany, Italy, Spain and the U.K.
said they have agreed to share data on the owners of offshore
entities and called on other jurisdictions to do the same.
The five ministers said that, under their new initiative, such
information will be automatically exchanged among their countries'
tax authorities, allowing them to identify and pursue tax evaders,
money launderers and "aggressive" tax avoiders. The plan builds on
existing information-sharing deals that allow tax authorities to
track citizens' incomes and assets.
"To be fully effective such exchange should be on a global
basis. We therefore hope you will support this initiative," the
ministers wrote their colleagues. They recommended the G-20 ask the
Organization for Economic Cooperation and Development, which has
drawn up a package of measures aimed at closing international tax
loopholes, to develop a single global standard to coordinate such
exchanges.
The trove of confidential documents leaked from the Panamanian
law firm Mossack Fonsesca and the information they contain has
sparked public anger from Iceland to the U.K. to Russia and sown
fresh doubts about the effectiveness of global efforts to rein in
tax avoidance.
The fallout cost Iceland's prime minister his job and prompted
questions in the U.K. about Prime Minister David Cameron's own tax
affairs after it emerged that he once owned shares in an offshore
fund set up by his late father. Mr. Cameron and other senior
figures in government—including Treasury chief George Osborne, a
signatory of the finance ministers' letter—took the unusual step of
making details of their tax arrangements public in an effort to
quell public demands for greater transparency.
The U.S. wasn't among the nations announcing Thursday's
agreement, and nonprofit groups have criticized the country for
allowing foreigners to use shell companies to hide assets in states
such as Nevada, Delaware and Wyoming.
The Treasury Department is close to finishing rules that would
require that banks and other financial institutions know the
beneficial owners behind companies they serve. Treasury also plans
to propose a rule to make foreign-owned limited liability companies
to obtain a tax identification number.
"The misuse of legal entities to obscure beneficial ownership is
a significant weakness in an otherwise strong and resilient U.S.
financial system, and it can only be resolved with meaningful
congressional action," Josh Drobnyk, a Treasury spokesman, wrote in
a blog post on Wednesday.
The Obama administration has asked Congress to enact a law that
would require banks and other financial institutions to provide the
government with account balances and other information on assets
held by foreigners as part of a global information-exchange system
where the U.S. is lagging.
Write to Jason Douglas at jason.douglas@wsj.com and Richard
Rubin at richard.rubin@wsj.com
(END) Dow Jones Newswires
April 14, 2016 16:25 ET (20:25 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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