UK agrees on the exchange of tax information with the dependent territories.

28.06.2013

In 2016 an agreement, that The UK has provided for the islands under its jurisdiction, shall become law. For today, this agreement is just a project, which will be discussed until the 6 September 2013.

The agreement is positioned as a next step towards the development of international cooperation in the tax area, directly the development in exchanges of information about taxes.

Potential parties of the agreement are the islands of Guernsey, Jersey and Maine, Anguilla, Bermuda, British Virgin Islands, Gibraltar, the Cayman Islands, Montserrat, Turks and Caicos Islands.

The agreement looks like FATCA (Foreign Account Tax Compliance Act), the main idea of which is requirements for individuals and legal entities to inform about their financial accounts abroad. The purpose of which is to strengthen a tax control and to improve the international tax compliance.

Thus, in accordance with the signed agreement, banks will have to compulsorily inform the foreign tax authorities about the availability of accounts of their citizens.

More over, along with the United Kingdom on April 9, 2013 the contract, which establish the exchange of information between the banks, was signed by four European countries: Germany, Spain, Italy and France.

Based on: http://www.hmrc.gov.uk/fatca/uk-crown-dependencies.pdf

Expert’s opinion

Talking about the exchange between banks and tax authorities is really popular. More and more countries are signing such agreements. Switzerland, giving billions to America, has «fallen» first. But, especially, it concerns the citizens of the EU, who are really followed by the tax authorities.

However, we understand that an automatic exchange of information is not yet happening. There is still no system that allows covering such large-scale events. Everything happens within the law. Banks can only respond to the request, which should be well-formulated. No bank will quietly deliver up their clients, or all the world's banks will be just closed due to the lack of money. And people will just hide their money in suitcases and under the pillows. 

Irina Lomakina ( Director of Moscow office of “Honest&Bright” Company)