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Germany Announces 10-Point Tax Evasion Plan

by Ulrika Lomas,, Brussels

13 April 2016

The German Government outlined the major aspects of a "10-point plan" on April 12 to combat international tax evasion and aggressive tax avoidance in the wake of the Panama Papers affair.

Under the plan, jurisdictions refusing to sign up to the new international standard for the automatic exchange of financial account data between national tax authorities would be blacklisted.

Finance Minister Wolfgang Schäuble also hinted at the sanctions that would be applied against blacklisted jurisdictions, telling German television channel ARD that "certain financial transactions... would no longer be possible" with states which haven't committed to the Common Reporting Standard. He also called for the creation of a single blacklist of uncooperative territories, arguing that the existence of multiple lists "makes them less effective."

The German plan also suggests that tax offences should not be subject to legal time limitations to make it easier for law enforcement authorities to prosecute tax evaders. "Where a taxpayer fails to provide adequate information, tax offences must not be time-barred," said Schäuble. "It cannot be acceptable for tax evaders to speculate that, if they conceal information about business relations abroad, time limitations will eventually grant them impunity. The relevant time period should begin only when all reporting obligations have been met."

Schäuble failed to clarify whether the proposed restrictions on time limitations for tax offences would apply only in Germany, or internationally under some form of agreement.

The Finance Minister also said that an international network of company ownership registries would be "more effective" than calling for a worldwide ban on "letterbox and shell companies," and confirmed that Germany is working "rapidly" towards the implementation of a register of beneficial ownership information. All EU member states are required to establish such a register by mid-2017 under the Fourth Anti-Money Laundering Directive.

TAGS: Finance | tax | business | tax avoidance | law | enforcement | offshore | Germany | Panama | Tax | Tax Evasion

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