https://www.pria.org/https://ula.kemendagri.go.id/https://fkip.unsulbar.ac.id/https://rskiasawojajar.co.id/https://satvika.co.id/https://lpmpp.unib.ac.id/https://cefta.int/https://terc.lpem.org/https://empowerment.co.id/https://pgsd.fkip.unsulbar.ac.id/https://ilmuhukum.unidha.ac.id/http://ebphtb.linggakab.go.id/https://gizi.poltekkespalembang.ac.id/https://eproc.jawapos.co.id/https://lppm.unika.ac.id/

Tax transparency update – detailed international update - November, 2013

04/12/2013
Tax transparency update – detailed international update
This extensive report covers the following topics:
Introduction
OECD/G20 pressing for automatic exchange of information
FATF new 40 recommendations
OECD Jakarta update, Peer review, and responses from the Seychelles, Cyprus and Luxembourg
OECD Peer review on Monaco
Example country responses:
  • Monaco – DTA with Mauritius
  • Monaco – TIEA with South Africa
  • Monaco – commits to Multilateral Convention on Mutual Administrative Assistance in Tax Matters
  • UK - David Cameron's position on disclosure of beneficial ownership
  • BVI Public Consultation on Beneficial Ownership Information
  • Cayman Islands Public Consultation on Beneficial Ownership Information
  • Hong Kong allows TIEAs
  • Jersey relaxes TIEA rules
  • Singapore includes tax crimes as money-laundering offences
  • European Union - Fourth Money Laundering Directive
Country exchange of information measures:
  • US FATCA
  • UK FATCA
  • G5 exchange of information forum
Other measures:
  • EU savings tax directive
  • France: Blacklists of BVI, Jersey, Bermuda and others, and anti-avoidance measures
The final word - The Swiss Bankers point of view
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Introduction

Regulation and legislation of financial institutions, including Corporate Service Providers, has increased in an unprecedented manner since the 9/11 terrorist attacks and the financial crisis of 2008. Under the impulse from intergovernmental bodies such as the G20 and the G8, the OECD and the Financial Action Task Force (FATF) have put together a framework for increased transparency for tax matters and beneficial ownership information. Along with the FATCA initiative out of the US this has led to a raft of proposed national and multi-lateral legislation, some of which has already been adopted, or is proposed for the near future.

Other initiatives such as the Directive of the European Parliament and of the Council on Alternative Investment Fund Managers (AIFM) are also being finalised. A further piece of the puzzle will be put in place when the Financial Stability Board finalises its program for “A Global Legal Entity Identifier for Financial Markets”.

The original rules were intended to catch terrorists and drug-barons, but the focus has now changed so that their principal targets are serious tax crime, corruption and financial stability.

The need to protect the tax bases of high-tax jurisdictions with debt-burdens and welfare state programs to maintain is understood. However to put this into perspective it must be realised that the tools for complying with this legislation are not yet ready, and the full extent of the burden of implementation has yet to be established. The extent to which a fair “level playing field” for all countries will be put in place, with full reciprocity from the major G20 nations, will show whether or not these initiatives have also been motivated out of a wish to stifle competition for financial services from non-G20 nations, or through a real desire for fairness.

These moves are considered by some to be necessary now to reign in the perceived negative side-effects of financial globalisation, free movement of capital and tax competition.

The positive effects of these movements on the world economy should not be forgotten. Low tax jurisdictions have contributed significantly to the increased fluidity of international trade, and the mobility of human and other resources. International stakeholders still seek to use legitimate tax neutral vehicles to structure transnational trade and investment. Increased regulatory burdens will raise the costs and time needed to complete transactions, without an obvious net benefit to the world as a whole.

At the same time that individual high tax countries who are the members of these supra-national groupings offer special tax incentives to attract High Net Worth Individuals and businesses to create wealth within their shores, and the OECD employees are exempt from taxation in most Member countries of the Organisation, one of the latest reports from the IMF discusses a super tax of 10% on savings in the Eurozone as a theoretical way to solve the debt problem and bring back the debt ratio to the “acceptable” levels of before 2008.

We should also keep at back of our mind the harmful potential of new technologies and data trawling techniques for the misuse of public data of a personal nature, and also the risks from the lack of protection of private and confidential data highlighted recently by documents leaked by Edward Snowden.

In the media there is often a flurry of news articles each time a new law is announced, or draft texts are published, before they are even adopted, or enacted. We try below to put these into perspective, by looking at the history and current status of some of the important initiatives in this area at an international level, as well as giving specific national examples. This overview is intended to help you to consider how this might affect you and your business, to try to put into perspective the global movement towards greater transparency on tax and other matters.
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OECD/G20 movement towards tax transparency, and automatic tax information exchange
Since the Summit in Washington in November 2008 in the aftermath of the global financial crisis tax transparency has become a key feature of the G20 meetings. Amongst many actions to be taken to avoid similar future crises it was agreed to give a major mandate to the OECD:

“Tax authorities, drawing upon the work of relevant bodies such as the Organization for Economic Cooperation and Development (OECD), should continue efforts to promote tax information exchange. Lack of transparency and a failure to exchange tax information should be vigorously addressed.”

The G-20 was set up to respond to the financial turmoil of 1997-99 through the development of policies that "promote international financial stability". The G-20 comprises countries considered to be systemically important, but omits over 170 governments (192 governments are members of the United Nations). Previously, major global economic, social and environmental issues were debated in the small, increasingly unrepresentative and often times ineffectual circle of G8 leaders.

In London, in April 2009 the G20 leaders stated that:
 
“We agree to take action against non-cooperative jurisdictions, including tax havens. We stand ready to deploy sanctions to protect our public finances and financial systems. The era of banking secrecy is over.”

The OECD published at that time a list of countries assessed by the Global Forum against the international standard for exchange of tax information.

The Centre for Tax Policy and Administration (CTPA) is now the focal point for OECD work on taxation. The Centre provides technical expertise and support to the Committee on Fiscal Affairs and examines all aspects of taxation other than macro-fiscal policy, which is dealt with by the Economic Policy Committee. Its work covers international and domestic tax issues, direct and indirect taxes, tax policy and tax administration.

The Global Forum on Transparency and Exchange of Information for Tax Purposes, which was originally established in 2000, was restructured and strengthened in 2009.

The standard of transparency and exchange of information developed by the OECD gained significant support. All 91 countries participating in the OECD run Global Forum on Transparency and Exchange of Information for Tax Purposes in 2009 committed to implement it. In October 2008, the UN also introduced the standard in the UN Model Tax Convention. The standard provides for exchange of information on request, in civil and criminal tax matters when the information is foreseeably relevant to the administration or enforcement of the taxes of the requesting party. All types of information, including bank and fiduciary information, must be exchanged. However, fishing expeditions are not allowed.

The G20 and the OECD stress the importance for developing countries to benefit from the sea change in transparency and exchange of information. Some emerging economies have entered into negotiations of tax information exchange instruments, in particular Argentina, China, India, and South Africa. Global Forum membership is open to developing countries.

The Forum on Harmful Tax Practices has taken forward the OECD’s work on harmful tax practices. At the St. Petersburg G-20 meeting in September, 2013 they announced that:

“Tax records will be shared around the world by 2015 as part of a G20 pledge to crack down on international tax evasion.”

The G20 representatives issued a statement of their commitment to the automatic exchange of information as the new global standard. The G20 countries will develop the details of the plan throughout 2014 with the goal of beginning to exchange information automatically on tax matters among G20 members by the end of 2015.

By that time 120 countries had committed to the G20’s standards of tax transparency, including FATF’s (Financial Action Task Force) recommendations on the disclosure of beneficial ownership of entities (see below).

The G20 Finance Ministers and Central Bank Governors fully endorsed the OECD proposal for global multilateral and bilateral automatic exchange of information for tax purposes in July 2013.
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FATF revised recommendations agreed by members on 15 February 2012
The Financial Action Task Force (FATF) is an inter-governmental body created in 1989 under the aegis of the EU G8 group. The FATF currently comprises 34 member jurisdictions and 2 regional organisations, representing most major financial centres in all parts of the globe. Its 40+9 Recommendations had previously been the standard for anti-money laundering and terrorist financing since 2001.

In 2012 the FATF Recommendations were revised to integrate counter-terrorist financing measures with anti-money laundering controls, introduce new measures to counter the financing of the proliferation of weapons of mass destruction, and to address the laundering of the proceeds of corruption and tax crimes.

The FATF is conducting a fourth round of mutual evaluations for its members based on these new Recommendations, and states will be expected to put in place local legislation to meet these new principles.
Significant changes include:
 
  • Improved transparency to make it harder for criminals and terrorists to conceal their identities or hide their assets behind legal persons and arrangements; and
  • Expanding the scope of money laundering predicate offences by including tax crimes.

Specifically in Recommendation 3. on the Money laundering offence the text states that “Countries should criminalise money laundering on the basis of the Vienna Convention and the Palermo Convention. Countries should apply the crime of money laundering to all serious offences, with a view to including the widest range of predicate offences.”

The relevant Interpretive Note states:

… Countries should apply the crime of money laundering to all serious offences, with a view to including the widest range of predicate offences. Predicate offences may be described by reference to all offences; or to a threshold linked either to a category of serious offences; or to the penalty of imprisonment applicable to the predicate offence (threshold approach); or to a list of predicate offences; or a combination of these approaches.

Where countries apply a threshold approach, predicate offences should, at a minimum, comprise all offences that fall within the category of serious offences under their national law, or should include offences that are punishable by a maximum penalty of more than one year’s imprisonment, or, for those countries that have a minimum threshold for offences in their legal system, predicate offences should comprise all offences that are punished by a minimum penalty of more than six months imprisonment…

Predicate offences for money laundering should extend to conduct that occurred in another country, which constitutes an offence in that country, and which would have constituted a predicate offence had it occurred domestically. Countries may provide that the only prerequisite is that the conduct would have constituted a predicate offence, had it occurred domestically.

In Recommendation 24. and 25. on Transparency and beneficial Ownership of Legal Persons and Arrangements countries are asked to ensure that information on the beneficial ownership and control of legal persons can be obtained or accessed in a timely fashion by competent authorities. In particular, countries should ensure that information is also available on express trusts, including information on the settlor, trustee and beneficiaries.

The relevant Interpretive Note requests measures to prevent the misuse of nominee shares and nominee directors, for example by applying one or more of the following mechanisms: (a) requiring nominee shareholders and directors to disclose the identity of their nominator to the company and to any relevant registry, and for this information to be included in the relevant register; or (b) requiring nominee shareholders and directors to be licensed, for their nominee status to be recorded in company registries, and for them to maintain information identifying their nominator, and make this information available to the competent authorities upon request.

These recommendations have led to jurisdictions revising their anti-money laundering directives (see more on the EU Fourth Money Laundering Directive below), and a move towards disclosure of beneficial ownership of companies (see more on the UK and David Cameron’s position on disclosure of beneficial ownership and the BVI and Cayman Islands consultation on Beneficial Ownership Information below).
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Global Forum moves towards automatic exchange of tax information and transparency – Jakarta November 2013
There were further developments in this area at the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes meeting in Jakarta in November 2013.

The Global Forum now brings together 121 countries and jurisdictions for wide-ranging discussions on transparency and exchange of information.  The Jakarta meeting was attended by delegates from 86 member jurisdictions and 11 international organisations. During the Jakarta meeting, six new countries became members: Azerbaijan, Dominican Republic, Lesotho, Romania, Senegal and Ukraine.

The meeting published new compliance ratings for 50 countries and jurisdictions on practical implementation of the Global Forum’s information exchange standard.

Working through a peer review process, the Forum assesses the adequacy of its members’ legal and regulatory framework for exchange of information in tax matters (Phase 1 review) as well as the application of this framework (Phase 2 review). To date, 124 peer reviews have been completed, including 50 Phase 2 reviews.

Eighteen jurisdictions are rated Compliant [i], 26 jurisdictions are rated Largely Compliant [ii], two jurisdictions are rated Partially Compliant [iii] and four jurisdictions are rated Non-Compliant [iv]. Fourteen additional jurisdictions [v] were not given compliance ratings, pending further improvements to their legal and regulatory frameworks for exchange of information in tax matters.

Four jurisdictions - Luxembourg, Cyprus, the British Virgin Islands and the Seychelles - are rated as non-compliant with international tax transparency standards in the latest report from the OECD's Global Forum. Switzerland was told it must further relax its banking secrecy laws before it can be rated at all.

In response to these ratings the Seychelles, and Cyprus defend their positions below.

See more on Luxembourg’s commitment to a global standard on automatic exchange of information below.

The British Virgin Islands has started a consultation on access to information on beneficial ownership records. See below.

Monaco was assessed as “largely compliant” (see more on this below).

For the full report see http://www.oecd.org/tax/transparency/global_forum_ratings.pdf

It should be noted that many countries in the world have not been subject to these peer review.

The Forum also established a new Automatic Exchange of Information (AEOI) Group, open to all interested countries and jurisdictions, to prepare the move towards AEOI implementation. Italy was elected chair of this group.  This is a new voluntary AEOI Group comprising members who wish to come together to work towards a common goal of engaging in AEOI. The main responsibilities of the AEOI Group will be to propose terms of reference and a methodology for monitoring AEOI on a going-forward basis, building on the expertise developed at the OECD level, - establishing a set of criteria to determine when it would be appropriate for jurisdictions to implement AEOI having regard, in particular to capacity constraints, resource limitations and the need to ensure confidentiality and the proper use of information exchanged, and helping developing countries identify their needs for technical assistance and capacity building before engaging in AEOI. The group will work in close co-operation with the OECD, the World Bank Group and the G20 Development Working Group.
 
They also agreed for further work  aimed at strengthening the definition of beneficial ownership and the availability of this type of information.
 
It was also noted that in the margins of the Jakarta meeting, 2 of its member jurisdictions signed the multilateral Convention on Mutual Administrative Assistance in Tax Matters. At present, 63 countries have signed the Convention, four have signed letters of intention to sign and 13 jurisdictions are now covered by way of territorial extension and 36 countries have now deposited their instruments of ratification (for more information see http://www.oecd.org/tax/exchange-of-tax-information/conventiononmutualadministrativeassistanceintaxmatters.htm).
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Seychelles defends its record at OECD Jakarta World Forum
At the latest Global Forum Seychelles received a rating overall as non-compliant.

In relation to this rating, Seychelles contested its review findings and has already requested a supplementary report to address the updates in its governance framework that have been made.

The Seychelles has emphasised its commitment to good practices and transparency in relation to tax information exchange while also championing the concerns of smaller jurisdictions in the review process and expressing its regret at some of the findings of the review undertaken on Seychelles' jurisdiction.

"Seychelles will never hide from its obligations,” said Minister Adam. “We believe in placing our commitments in the sunlight for all to draw their own conclusions. In the same way that we do not believe that financial transactions should be carried out in the shadows, neither should our reviews be subject of secrecy or shame.”

Seychelles’ Phase 2 report, which covered the three-year period under review between 1 July 2009 and 30 June 2012, was on the agenda for adoption along with those of 49 other countries.  Although the conclusion of the report is that Seychelles met the standard for 8 essential elements out of 10, there are two elements where Seychelles has been rated non-compliant.

The two areas of concern relate to the issue of bearer shares and availability of record keeping of IBCs and their agents, and in response to these issues, Seychelles has illustrated that it has cooperated fully with the OECD and has also taken action to address these concerns.

However, these actions can only be formally recognised through a supplementary review and thus the Global Forum will maintain the overall rating of non-compliant relating to Seychelles until re-assessment can take place.
Seychelles is already well-positioned to address all the recommendations in the report. The amendments to the International Business Companies (IBCs) Act to eliminate bearer shares and to strengthen the framework for the keeping of records and strengthening the sanctions for non-compliance, have been gazetted on 15th November and will be presented to the National Assembly on 26th November.

A number of delegations similarly raised concerns, particularly of smaller states, with regards to the manner in which the process of review is undertaken, where the framework for interaction is based on experience in sharing information which is not equal among states.
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Cyprus defends its position after the Global Forum rating
The Organization for Economic Co-operation and Development's Global Forum on Tax Transparency and Exchange of Information recently released compliance ratings for 50 jurisdictions at a meeting in Jakarta, based on an assessment of legal and regulatory frameworks in the jurisdictions and how these are implemented.

Cyprus, along with Luxembourg, British Virgin Islands and the Seychelles have been rated "non-compliant" with international tax transparency norms.

The OECD raised concerns on Cyprus failure to respond to tax information requests. Another concern the OECD has is that less than 25% of Cyprus-based corporations filed income tax returns with the government between 2008 and 2012. The low number of filings may have accounted for a lack of government oversight and resulted in Cyprus not exchanging up-to-date tax information with other jurisdictions, the report said.

The Ministry of Finance defended the Island's tax regime, saying the government has implemented a number of progressive reforms that were not accounted for.

They note that the rating does not take account of changes in the law that were implemented in 2012. The law now requires that information on trusts should be made available, and that provisions have been removed that allowed for the issue of bearer share warrants in public companies, and for companies that are Cyprus-incorporated but not tax resident, to avoid filing tax returns.

Regarding the information requests, Finance Ministry notes that the country has in the last year “significantly enhanced” its ability to respond to requests for information from other jurisdictions.

The Ministry argues that Cyprus ought to have been assigned a higher rating. With coordinated efforts now being made by the Ministry of Finance, the tax authorities, the accounting and legal profession, the Cyprus Securities and Exchange Commission and the Companies Registrar and having in mind also the aforementioned reforms, they believes that the Cyprus rating will improve during the OECD's next review stage in 2014.
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Luxembourg commits to a global standard on automatic exchange of information
In November Luxembourg, alongside 36 of its partners, signed a declaration strongly supporting the development in the OECD of a single global standard for automatic exchange of information between tax authorities. “This declaration is fully in line with recent decisions taken by the Luxembourg Government such as the decision of 10 April 2013 to introduce, on 1 January 2015 and within the scope of the 2003 EU Savings Directive the automatic exchange of information and the signing by Luxembourg on 29 May 2013 of the OECD Convention on Mutual Administrative Assistance in Tax Matters.

Luxembourg expects the development of this global standard on automatic exchange of information to assure a worldwide level playing field and a much needed coherence of transparency rules within the international community. The creation of the same conditions for all international financial centers is essential for a successful fight against tax evasion at a minimum costs for tax authorities and national economies.”

Luxembourg called upon all countries participating in the G-20 and OECD discussions to join this initiative.
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Monaco is assessed as being "largely compliant" at the OECD Global Forum in Jakarta
As part of the 6th meeting of the OECD Global Forum held in Jakarta on 21 and 22 November 2013, the rating for Monaco, based on the phase 1 and phase 2 reports, was approved, as were as those for 49 other States.
 
Following the phase 2 review, which led to a report approved in June 2013 in Paris, Monaco was rated "largely compliant" with international standards on transparency in tax matters (like, for example, the United Kingdom and Italy).  This evaluation is recognition of efforts made by Monaco over several years.
 
As a reminder, on 5 November 2013, Monaco signed a letter of intention to join the OECD's Multilateral Convention on Mutual Administrative Assistance in Tax Matters.  The Principality of Monaco is therefore pursuing the policy desired by H.S.H. Prince Albert II with regard to the transparency and exchange of tax information and positions itself as an active member of the current international movement.
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Example country responses:
As a result of international pressure various jurisdictions have enacted legislation relaxing laws on the exchange of information, or signed additional Tax Information Exchange Agreements (TIEA), or Double Tax Treaties, committed or signed up to the OECD Convention on Mutual Administrative Assistance in Tax Matters. Other jurisdictions are consulting on the next steps to take.

Monaco – DTA with Mauritius
Monaco – TIEA with South Africa
Monaco – commits to Multilateral Convention on Mutual Administrative Assistance in Tax Matters
UK  and the disclosure of beneficial ownership
BVI Public Consultation on Beneficial Ownership Information
Cayman Islands Public Consultation on Beneficial Ownership Information
Hong Kong allows TIEAs
Jersey relaxes TIEA rules
Singapore includes tax crimes as money-laundering offences


For full details on these measures see the continuation of the article at:
http://www.rosemont-int.com/news/04-12-2013-tax-transparency-update-detailed-international-update-november-2013
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European Union - Fourth Money Laundering Directive
The European Union is finalising its consultation process on the Fourth Money Laundering Directive, which largely follows the changes FATF implemented in 2012.

On 5 February 2013, the European Commission adopted proposals to reinforce the European Union's existing rules on anti-money laundering and fund transfers. These proposals included a draft directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (the “4th AML Directive”).

The 4th AML Directive provides for a more targeted and focussed risk-based approach to customer due diligence and includes proposals to:

• improve clarity and consistency of the rules across the Member States by providing a clear mechanism for identification of beneficial owners. In particular, companies will be required to maintain records as to the identity of those who stand behind the company in reality;

• improve clarity and transparency of the rules on customer due diligence in order to have in place adequate controls and procedures... The provisions dealing with politically exposed persons, i.e. people who may represent higher risk by virtue of the political positions they hold, are also expanded to now also include “domestic” PEPs and those in international organisations;

• extend its scope to address new threats ... and by including an explicit reference to tax crimes;

The next steps will involve the proposal being adopted by the European Parliament and the Council of Ministers under the ordinary legislative procedure, and the adoption of equivalent legislation by each individual EU country.
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Country exchange of information measures
In order to put in place some of these measures additional tools have been developed. These tools often allow governments to obtain information concerning non-resident nationals that is not available for nationals resident in their home country. Billions of dollars are being spent by private institutions to implement this legislation.

US FATCA
UK FATCA
G5 pilot project for automatic exchange

For more detail on these projects see our briefing at:

http://www.rosemont-int.com/news/05-12-2013-us-fatca-uk-fatca-g5-exchange-of-information-forum/
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Other measures:
Other examples of country specific measures or EU initiatives can be found below:

EU savings tax directive - Taxation of Savings Income
Income from interest on capital is one of the most mobile tax bases, and tax competition is rife. In order to ensure the proper operation of the internal market and tackle the problem of tax evasion the savings tax Directive was adopted by the EU in June 2003. It has been applicable since 1 July 2005.

The Directive applies to interest paid to individuals resident in an EU Member State other than the one where the interest is paid. Member States had to transpose its provisions into national legislation.

The European Commission on 13 November 2008 adopted an amending proposal to the Savings Taxation Directive, with a view to closing existing loopholes and better preventing tax evasion.

The European Union's (EU) Economic and Financial Affairs Council (ECOFIN) reached an agreement on a mandate to allow the European Commission to negotiate amendments to agreements under its Savings Tax Directive.

In May 2013 ministers agreed to give the Commission the go-ahead to launch talks with Switzerland, San Marino, Andorra, Lichtenstein and Monaco.

Despite broad support for the amendments in November 2013 Austria and Luxembourg announced that they would block the European Union's attempt to pass new savings income rules intended to curb tax avoidance and increase transparency in international banking until Switzerland and other alleged tax havens also agreed to new reforms.
At a hearing in Brussels, Luxembourg Finance Minister Luc Frieden said the European Commission, should hold off on passing the proposal until Switzerland, Liechtenstein, Monaco, Andorra and San Marino agree to equivalent measures. Luxembourg's position was backed by Austria's Finance Minister Maria Fekter. (See Luxembourg’s position on exchange of information above).

To support his position, Frieden cited agreements those third-party countries signed with the EU in 2004 requiring that they agree to reporting rules that are on par with the EU. The EU has been pushing to pass enhanced information sharing agreements and tougher reporting rules by the end of the year.

Frieden released a statement stating that any commitment from Luxembourg needs to be accompanied by commitments from other countries to ensure a “level playing field." He said that the council should wait to pass the new savings income rules until after negotiations with the third-party countries are completed.
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France - an example of defensive measures
France recently published a list of 60 measures to fight against tax evasion. In November they signed a FATCA Agreement with the US.

France is to introduce a new definition of their abuse of law rule, the « Abus de droit fiscal”. The definition will be modified to target cases where the evasion or avoidance of tax (« d'éluder ou d'atténuer les charges fiscales ») is the principal motive as opposed to the exclusive motive of a transaction. (Subsequenty censured by the Conseil Constitutionnel)

France is intending to make all tax planning schemes reportable from 1 January 2015. Such schemes will be subject to a prior declaration to the tax authorities by the tax advisors, and by those putting in place the scheme. (Subsequenty censured by the Conseil Constitutionnel)

During 2013 France has updated its list of territories considered to be non-cooperative. The list now comprises Nauru, Guatemala, Brunei, Marshall Islands, Montserrat, Botswana, Bermuda, British Virgin Islands and Jersey (n.b. Bermuda and Jersey removed 2014).

Certain transactions with these jurisdictions will be subject to 75% withholding from 1 January 2014.

It also intends to extend this list to include countries that will not engage in automatic exchange of information from 1 January, 2016 (n.b. in December this legislation was censured by the Conseil Constitutionnel because the deadline of 2016 was considered unrealistic).
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The final word - The Swiss Bankers point of view
In November 2013 the Swiss Bankers Association (SBA) published a report entitled “Wealth management – at a global level and in Switzerland”. The report is a status report on the banks and looks at sector trends. It is interesting to read some of their comments from the report below and to see how some of the measures reviewed above have changed their perception on the role of Swiss Banking. We quote from the report below:

Wealth management for private clients, the traditional private banking business, is hugely important both for the Swiss financial centre and for the Swiss economy as a whole... Few other areas of business are currently undergoing more extensive changes than private banking..

We anticipate that implementation of the automatic exchange of information within the OECD will in the short term lead to a reduction in the volume of assets managed in Switzerland, as previously untaxed assets will have to be regularised before the move to automatic exchange of information can take place. We expect the situation to stabilise over the longer term, however, with a corresponding increase in assets managed in Switzerland.”

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We hope that this extensive report has given you a feel for the rapid evolution in transparency and tax matters. There is no certainty as to where the legislative river will meander in the short and longer term. We can however see where the OECD is trying to steer the boat!

Should you need help to navigate through this new world or require a pdf copy of this article please contact us at admin@rosemont-int.com