As published on internationalinvestment.net, Thursday January 23, 2020.
A global coordinated day of action to put a stop to the “suspected facilitation of offshore tax evasion” took place this week across the UK, the US, Canada, Australia and the Netherlands.
This is the first “major activity” for the Joint Chiefs of Global Tax Enforcement (J5), formed in 2018 to lead the fight against international tax crime and money laundering.
The day of action was part of a series of a J5 investigations into a central American financial institution, which is offering products and services believed to facilitate tax evasion and money laundering for customers across the globe.
The J5 said in a statement: “It is believed that through this institution, a number of clients are using a sophisticated system to conceal and transfer wealth anonymously, to evade their tax obligations and launder the proceeds of crime.”
The group brings together tax, crypto and cyber experts to target those who enable global tax evasion by gathering information, sharing intelligence and collaborating on operations.
Will Day, deputy commissioner at the Australian Tax Office, said: “This multi-agency, multi-country activity should degrade the confidence of anyone who was considering an offshore location as a way to evade tax or launder the proceeds of crime.
“Never before have criminals been at such risk of being detected as they are now. Our increased collaboration, data analytics and intelligence sharing mean there is no place worldwide you can hide your money to avoid contributing your obligations.”
Don Fort, US chief at the Internal Revenue Service’s criminal investigation unit, said: “Working with the J5 countries, who all have the same goal, we are able to broaden our reach, speed up our investigations and have an exponentially larger impact on global tax administration.
“Tax cheats in the US and abroad should be on notice that their days of non-compliance are over.”
HM Revenue and Customs (HMRC) said there is more than £200m of suspected tax evasion and money laundering in the UK alone.
As part of the 22 January day of action, HMRC officers executed a search warrant in the Stoke, Staffordshire area, leading to one arrest.
The unnamed man was questioned by HMRC and then released pending further enquiries. Investigations are ongoing.
HMRC officers have also visited several businesses and sought information from them to assist with their ongoing investigations.
Information has now been gathered as a result of the investigations and it is expected “further criminal, civil and regulatory action will arise from this work in each country”.
Simon York, director of HMRC’s fraud investigation service, said: “Tax evasion is a global problem that needs a global response and that is what the J5 provides.
“This kind of international action shows that we can and we will take on the most harmful, sophisticated and complex crimes and that we are committed to levelling the playing field for honest businesses and taxpayers.”
The J5 is working on more than 50 investigations including those involving “sophisticated international enablers of tax evasion, a global financial institution and its intermediaries who facilitate taxpayers to hide their income and assets”.