Leaders of the major G8 economies have agreed to a deal with new measures to clamp down on money launderers, illegal tax evaders and corporate tax avoiders.
These measures are designed to fight illegal evasion of taxes, as well as legal tax avoidance by large corporations that make use of loopholes and tax havens.
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British prime minister David Cameron hailed the Lough Erne agreement saying it "has the potential to rewrite the rules on tax" and added, "We have commissioned a new international mechanism that will identify where multinational companies are earning their profits and paying their taxes so we can track and expose those who aren’t paying their fair share." The scheme will be developed by the Organisation for Co-operation and Development.
They new deal will require shell companies, often used to exploit tax loopholes and invest money anonymously, to identify their effective owners.
Governments have also backed a push to give each other automatic access to information on their resident’s tax affairs.
The US, Canada, France and Italy joined the UK in agreeing to set up registries. On 17 June 2013, PBI reported that Canada is in support of G8 efforts to curb tax evasion. Chancellor George Osborne unveiled plans for a UK register of companies and their owners and the White House also reported a similar plan for the US.
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By GlobalData
Tax talks
The G8 summit which urged countries to "fight the scourge of tax evasion" saw the launch of free trade negotiations between the EU and US and tax, trade and transparency were placed at the top of the UK’s agenda.
In May, Cameron wrote to the leaders of Britain’s offshore tax havens emphasising on the need to "get our own houses in order" before the G8 Summit, and pushed for international action to increase transparency and tackle avoidance schemes.
On 13 June 2013, the European Commission added new requirements to tax disclosure rules.
The Isle of Man has now published an action plan to build on its commitment to working with the international community to tackle tax evasion and fraud.
However, agencies have warned that the measures taken to tackle tax evaders do not go "far enough", expressing concern that the world’s poorest countries would not be covered immediately and that new registers revealing who owns and controls companies will only allow limited access.
