Bermuda

Cameron introduces new tax transparency rules


By added on 12/04/2016

The UK has signed a deal with 129 jurisdictions to share tax information, David Cameron has announced in the House of Commons, as he defended his personal finances to MPs, reports the Financial Times.

The prime minister announced that the crown dependencies have agreed to implement an international standard for tax reporting.

Jurisdictions such as Cayman Island and Bermuda have agreed to share reporting information, implement a common system for collecting information and use central registers of beneficial ownership.

Only Guernsey and Anguilla are yet to signed up to the deal, but the prime minister expects them to do so within the next days.

From June, the UK will become the first country in the G20 to set up a register of beneficial ownership, he said.

Michael Dunkley, Bermuda’s premier and minister of national security, confirmed the Crown dependency signed an agreement with the UK to extend its sharing of beneficial ownership information.

He said the agreement reflects Bermuda’s “long-held commitment to deterring money-laundering and financial crime from our shores”.

During his speech, the prime minister also confirmed the introduction of a taskforce to deal with the Panama paper leaks.

The transparency offered by Britain’s offshore centres such as Jersey and the British Virgin Islands will be “far in advance of most other countries”, David Cameron said on Monday.

The prime minister said the overseas territories and crown dependencies had agreed to provide UK tax and law enforcement agencies with full access to company ownership details, after a “sustained campaign” by his government.

But campaigners said the concession made by the offshore centres on transparency fell far short of what was needed to tackle the abuse revealed by the Panama Papers. It also fell short of Mr Cameron’s demand in 2013 for them to rip aside the “cloak of secrecy” by creating a public register of beneficial ownership information.

Christian Aid said Mr Cameron’s climbdown was “unacceptable”. Nick Bryer, Oxfam’s head of inequality, said: “UK-linked tax havens like the British Virgin Islands are at the heart of the Panama Papers scandal. If the UK is truly to lead the fight against tax dodging then David Cameron needs to do better than this.”

Margaret Hodge, a senior Labour politician, asked Mr Cameron if he would use his powers, through the privy council, to order the tax havens to publish registers of beneficial ownership. Mr Cameron said the government thought they should make ownership details publicly available.

He said: “We think that is the way to go but let’s be clear. Very few countries in the world … have these public registers of beneficial ownership. Our crown dependencies, our overseas territories will now be far in advance of most other countries. Instead of attacking them we ought to praise them and thank them for what they have done.”

The offshore centres rejected his call to put company ownership information in the public domain on the grounds that it would make privacy-conscious individuals move their business elsewhere.

After long negotiations, the offshore centres agreed to hold the information on the people who ultimately own and control companies — so-called beneficial owners — in their jurisdiction and improve the speed and access of information exchange with UK law enforcement authorities.

Bermuda, which already had a continually updated central register, said it was now opening its central register to the UK National Crime Agency, which previously had to go through “certain time-consuming procedures” to gain access. It already passed information to HM Revenue & Customs within 24 hours, it said.

Jersey, which has had a central register of beneficial ownership since 1989, said it had agreed to use technology to speed up its response to requests, so it could answer non-urgent queries in 24 hours and urgent queries in one hour.

Ian Gorst, its chief minister, said: “This is in response to a need for information without delay where terrorist activities are involved and is of particular significance in the light of recent events in Paris and Brussels.”

In a statement last week, the Cayman Islands said it believed it could reach agreement with the UK, noting that during the discussions the British government had talked about imposing “its preferred approach through legal means”.

Guernsey and Anguilla have not yet reached agreement but Mr Cameron said they were expected to do so shortly. In a statement Guernsey said it was “committed to putting in place a secure, consolidated and locally accessed register with a designated point of contact, and putting the provisions in place for timely and reciprocal information exchange between Guernsey and UK law enforcement authorities”.