UK and International Tax news
OECD Statement On Panama Papers
Monday 11th April 2016
The OECD Secretary General has recently issued a statement commenting on the recent leak of “Panama Papers” which have shone light on Panama’s culture and practice of secrecy.
The SG referred to Panama as the last major holdout that continues to allow funds to be hidden offshore from tax and law enforcement authorities. He added that the OECD has been leading a global crackdown on these practices since 2009, working hand-in-hand with the G20. Through the Global Forum on Transparency and Exchange of Information, it has consistently warned of the risks of countries like Panama failing to comply with the international tax transparency standards. In March, G20 Finance Ministers were told that Panama was back-tracking on its commitment to automatic exchange of financial account information. The consequences of Panama’s failure to meet the international tax transparency standards are now in full public view and Panama must put its house in order, by immediately implementing these standards.
The SG described that while the “Panama Papers” data expose nefarious activities, they also show a decline in the use of offshore companies and bearer share companies, which is a testament to the significant transformation effected in the last seven years to establish robust international standards on tax transparency, including on beneficial ownership. The SG added that 132 jurisdictions have committed to the standard on exchange of information ‘on request.’ Of those, 96 jurisdictions will introduce automatic exchange of financial account information within the next two years.
Almost 100 jurisdictions have joined the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. As a result of the OECD’s in-depth peer review process, the use of bearer share companies is close to being eliminated across the world, and the beneficial ownership rules have been strengthened to ensure that information is now available to tax authorities when they need it.
The SG confirmed that ‘establishing global standards and making commitments were just the start. Effective implementation was the key to lifting the veil of secrecy once and for all and eradicating tax evasion. The time has come to make sure that no jurisdiction can benefit from failing to meet their commitments’.
Finally he noted that the next G20 Finance Ministers meetings and the Global Anti-Corruption summit taking place in London in May 2016 will be critical.
If you would like further information on the above, please contact Keith Rushen on 0207 486 2378.
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