London Office Of Anti-Tax Shelter Initiative Comes On Stream

by Robert Lee, Tax-News.com, London

01 October 2007

The UK's HM Revenue and Customs on Thursday announced the opening of the London office of a multilateral anti-tax shelter initiative known as the Joint International Tax Shelter Information Centre (JITSIC).

JITSIC was established in 2004 by the tax administrations of Australia, Canada, the United Kingdom and the United States, to supplement their ongoing work in identifying and curbing tax avoidance and shelters, and those who promote them and invest in them.

JITSIC London, which launched on September 10, and JITSIC Washington, the first centre to open, will work together as a single office. The London office will also include a delegate from JITSIC's newest member, Japan. The Commissioners have also made plans for the future development of JITSIC, along with measured expansion to cover Asia in addition to North America and Europe.

Welcoming the opening of JITSIC's London office, Financial Secretary to the Treasury, Jane Kennedy commented:

"I'm delighted that London has been chosen as JITSIC's second home. Countries need to work together in order to stamp out tax avoidance, which deprives public services of vital resources. Tax avoidance gives those who seek to cheat the system an unfair advantage over the vast majority of taxpayers who play by the rules. JITSIC has already proved very effective in combating tax avoidance and its new centre in London will help us further build on that work."

The JITSIC offices will exchange information on abusive tax schemes and their promoters and investors, consistent with the provisions of bilateral tax conventions.

According to JITSIC, members have already identified and challenged highly artificial arrangements including: a scheme marketed cross-border, involving hundreds of taxpayers and tens of millions of dollars in improper deductions and unreported income from retirement account withdrawals; financial institutions creating financing structures selling the benefit of foreign tax credits separate from the economic benefit of the underlying income; and brokers providing made to order losses on futures and options transactions for individuals in other JITSIC jurisdictions, leading to a tax loss of over one hundred million dollars.

"The selection of London as the second base for JITSIC's work is very good news - not only for the UK - but for every country committed to fairness and transparency in their tax systems," commented HMRC Director General (Business) Dave Hartnett.

"JITSIC is already rising to the challenges posed by international tax avoidance in its increasingly cunning and complex forms. The understanding gained and exchanged will materially benefit every taxpayer who prefers to play by the rules," he concluded.

Recommended