Economic news Embassy 67
Call for global effort on tax evasion
Tough new UK tax laws will give British authorities enhanced powers to pursue companies who facilitate tax dodgers in other jurisdictions, the Financial Secretary to the Treasury Jane Ellisson MP told a gathering of financial attachés.
Addressing the AERL, the minister said: “We are going further than any other country by making it a crime if a corporation here in the UK facilitates tax evasion in another jurisdiction.”
It will also be a criminal offence for representatives of any corporation based anywhere in the world to facilitate tax evasion in the UK.
However diplomats raised concerns about the extra-territorial reach of the new Bill, where competitive tax laws in one jurisdiction could be interpreted as tax evasion. “It is an issue of sovereignty,” commented one envoy. “We need to know more about the definition of tax evasion and the potential reach. We need some dialogue so that this is not seen as an imposition of more powerful nations on more vulnerable smaller jurisdictions.”
Treasury officials assured envoys authorities would only pursue the “hard end” of tax non-compliance and that the tax evasion had to be regarded as a criminal offence in the country suffering a tax loss for the case to proceed.
Ellison also told financial attachés about UK efforts to create a global standard for the exchange of information on beneficial ownership of companies. “We know criminals make up artificial companies to hide their activities. By working together to share information on who is behind these shell companies we can help law enforcement,” she said.
A pilot scheme launched earlier this year with the UK, Germany, France, Italy and Spain had attracted support from more than 50 jurisdictions and the Minister encouraged countries not currently signed up to join the discussions.
“There are huge complexities involved and a lot more to do but your role in facilitating that cooperation is really important,” she said.
Diplomats welcomed the initiative and suggested forming a contact group with the Treasury for exchanging views.