Gov’t launches 5-country pilot to exchange tax information
The government has agreed with France, Germany, Italy and Spain to develop and pilot multilateral tax information exchange, where financial information will be automatically exchanged between the five countries, in a fresh effort to curb tax evasion.
The government said this will help catch and deter tax evaders as well as provide a template for wider multilateral automatic tax information exchange.
This pilot will be based on a ‘model agreement’ that was designed to implement the Foreign Account Tax Compliance Act developed between these countries and the US.
The US’s Fatca is aimed at preventing investors from evading taxes when holding assets abroad. The act forces non-US firms to gather information about clients to ensure that US investors do not slip through the net.
The government said this will ensure that international tax evasion is tackled in a way that minimises costs for both businesses and governments. A joint letter has today been issued to the European Commission setting out the terms of the agreement.
The Prime Minister has set out how he wishes to use the UK’s presidency of the G8 to explore options for greater levels of tax information exchange, particularly on a multilateral basis.
The government said it therefore sees this agreement as an important early step in a much wider move towards a new international standard in the automatic exchange of tax information, providing a step change in the ability of tax administrations to clamp down on tax evasion.
David Gauke, Exchequer secretary to the Treasury, said: “This is an important further step in the fight against tax evasion and represents the next stage in promoting a new standard in the automatic exchange of tax information.
“This builds on the agreements we have reached with the Isle of Man, Guernsey and Jersey and the discussions currently underway with the Overseas Territories.”