G20 Tax Information Sharing Agreement

G20 Tax Information Sharing Agreement.

The 20 largest economic nations on the planet, the so called G20 Group, have issued a policy statement that all nations have agreed to share tax information for residents when requested for each country and in particular targeting large global tax evasion buy companies.

Target Date:  The aim is for G20 to have information sharing in place by 2015.

Who is on the tax radar: Large companies and wealthy, internationally mobile people.

 Who are the G20 Nations:

• Australia
• Argentina
• Brazil
• Canada
• China
• European Union (as a whole)
• France
• Germany
• India
• Indonesia
• Italy
• Japan
• Mexico
• Russia    
• Saudi Arabia
• South Africa
• South Korea
• Turkey
• United Kingdom
• United States

Will it be effective?

Many offshore companies are set up in tax havens with anonymous directors and/or bearer shares (these are shares where this is no name on them – if the share certificate is in your possession you own the company, with no other proof of ownership.

We therefore, see this as a difficult action to enforce.  Legitimate companies trading in any of the above nations will be scrutinised, but it is the offshore havens that hold the key.

Both the USA and European nations have for some years now been brokering information sharing agreements with many of the usual Caribbean financial centres as well as the likes of Lichtenstein.  This is the key to success.

Tax Havens Wary

We suggest financial centres that offer tax incentives to offshore companies that trade outside their financial territory (“off island”) will be wary of:

Firstly the employment and trade being an offshore centre has brought in is at risk but, secondly, offshore centres will be mindful of that most money laundering runs through some of these territories and the larger nations, losing tax revenue, will be keen to enforce disclosure.  G20 nations could even withdraw financial aid or military protection if information sharing is not high on a havens agenda.