The issue of tax evasion is never far from the headlines at the moment, but came under the international spotlight again earlier this week with the news that the Parisian headquarters of Swiss bank UBS had been visited by French police.
According to the Independent, this is the second such visit by the French authorities and is part of an investigation launched in 2012 into prosecution claims that the bank had been helping certain clients evade their tax liabilities. UBS has strenuously denied any wrongdoing and is cooperating with the investigation.
Worldwide Focus
France is not alone in stepping up its efforts to tackle tax evasion. The OECD Global Forum on Transparency and Exchange of Information for Tax Purposes recently met in Jakarta to discuss that very issue, with a focus on how to improve transparency and international tax cooperation.
At the meeting, Liechtenstein and San Marino became the 62nd and 63rd countries to sign up to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters – an important multilateral tax instrument designed to combat tax evasion and avoidance by aiding the automatic exchange of information between countries.
Convention to Tackle Tax Evasion
According to the OECD, the Convention is a valuable tool that can be used by governments to tackle offshore tax evasion. It provides for “spontaneous exchange of information, simultaneous tax examinations and assistance in tax collection”, while it also ensures “compliance with national tax laws and respects the rights of taxpayers by protecting the confidentiality of the information exchanged”.
The role of the Convention in tackling tax evasion is particularly important in the current economic climate, where tax evasion can be very costly for countries that have to operate under increasingly tight budgets and financial constraints.
Also at the meeting, the UK deposited declarations extending the territorial scope of the Convention to cover the Isle of Man (a Crown Dependency) and Anguilla, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Montserrat, and Turks & Caicos (UK Overseas Territories).
In addition, Canada, New Zealand, the Slovak Republic and South Africa deposited instruments of ratification, while letters of intention to sign the Convention were put forward by the Philippines and the Seychelles.
The growing number of countries interested in signing up to the Convention is indicative of the high priority now placed on tackling tax evasion by the international community. It is also an indication of the growing realisation that tax evasion is a global issue that cannot be tackled effectively in isolation.
Commission promotes international cooperation
Work to combat international tax evasion is also underway in the European Commission. The Commissioner for Taxation, Customs, Statistics, Audit and Anti-fraud, Algirdas Šemeta, is currently visiting Singapore and Australia for discussions on a variety of topics, including international tax matters, customs cooperation and trade facilitation.
Because of its status as an international financial centre, Singapore has an important part to play in international efforts to increase tax transparency and fight tax evasion.
Australia is seen as equally important because it will hold the Presidency of the G20 next year and as such will be essential in pushing forward the international agenda against tax evasion and avoidance. Commissioner Šemeta is apparently offering Australia the full support of the EU to ensure that the international fight against tax evasion continues and there is no loss of momentum.
HMRC Taskforce Targets South East
Closer to home, HMRC is continuing its own fight against tax fraud. It recently announced a number of new taskforces, including one in the South East and South, which aims to tackle people with offshore accounts and those living lifestyles beyond their obvious means through assets from undeclared income. According to HMRC, it expects to recover around £2.8 million through the work of this taskforce alone.
“Deliberately not declaring your income is serious,” explained David Gauke, Exchequer Secretary to the Treasury. “Our message is – do the right thing. If you haven’t already, come clean now. If you don’t, we will find you, investigate you and, not only could you face a heavy fine, but you may face a criminal prosecution as well.”
HMRC reports that its taskforces have already collected over £100 million since 2011-12.
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For specialist criminal defence legal advice, including advice on tax evasion or tax fraud charges, please contact our solicitors Jeffrey Lewis or Siobhain Egan on 020 7387 2032 or complete our online enquiry form here.