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Germany sets out plan to tackle tax evasion


Added on 13/04/2017

The scandal, which broke last April, involved the leak of more than 11 million documents from Panamanian law firm Mossack Fonseca exposing how the rich and powerful set up shell companies in offshore jurisdictions to avoid paying tax on their wealth, reports International Adviser.

Germany hopes to crack down on the practice by implementing measures such as signing a tax information exchange agreement with Panama, which the government is still negotiating – admitting it has proven “difficult” to arrange.

Other measures include:

creating of a single global blacklist of non-cooperative jurisdictions, preferably overseen by the OECD;

Urging all states and territories, particularly those with financial centres, to adopt Common Reporting Standard (CRS) on automatic information exchange;

monitoring compliance with information exchange standards through the OECD;

establishing registers of beneficial owners of companies at global level;

networking and standardising national registries of beneficial ownership;

legislating for the mandatory disclosure of tax avoidance schemes;

introducing stronger penalties for breaches of corporate law;

extending the statute of limitations in tax evasion cases; and

strengthening national anti-money laundering measures.

The government added that many of measures are still in progress but hopes to roll them out by the end of the year.

It comes just days after the UK became the first country to commit to making its beneficial ownership data public despite other jurisdictions such as the Isle of Man and the British Virgin Islands resisting the measure.

Germany’s approach to tax evasion is likely to set the tone for the rest of the EU, which last September released a ‘scoreboard’ of 81 non-EU states to help identify countries located outside the bloc that enable tax avoidance.

The EU is currently consulting on measures to force financial advisers to report “aggressive” tax planning schemes which help clients avoid paying tax.

Germany’s ‘James Bond’

Tax evasion also came under the spotlight in the high-profile case of former intelligence agent Werner Mauss.

Dubbed ‘Germany’s James Bond’, he went on trial last year accused of evading €15.2m ($16.1m, £13m) in taxes on profits from offshore investments.

Mauss denies any wrongdoing and claims the offshore accounts were opened by Western and Israeli intelligence agencies to fund secret missions around the world.