The 2004 Disclosure of Tax Avoidance Schemes (DOTAS), introduced by the UK in 2004, was one of the first pieces of legislation, globally, to address the topic of transparency and disclosure.
With the on-going implementation of the OECD’s Common Reporting Standards (CRS), the prescient title of UK HMRC’s 2013 publication ‘No Safe Havens’ is more relevant than ever.
Commercial and wealth management operations and the subsequent planning and advice for individuals and corporations will be very different in 5 to 10 years time. Clients and advisers need to act now to manage this change as smoothly as possible.
Summary of Information Sharing Obligations
The OECD’s Automatic Exchange of Information initiative and CRS establish the framework for sharing information between jurisdictions.
The reality is that detailed information about unauthorised assets held abroad, as well as undeclared income generated by such assets, will soon become available to the authorities in the 96 countries currently committed to information exchange.
The 4th EU Anti-Money Laundering Directive requires European members states to develop central registers of beneficial ownership. Denmark and the UK already have such registers as well as EEA member Norway. As automatic exchange of information becomes the norm, so too will central registers of beneficial ownership.
Implications of Information Availability
Tax avoidance and wealth management have become highly politicised globally and, within the next two years, authorities in revenue hungry countries will have access to a huge volume of information on individuals.
Advisers should expect high profile, big impact, clients (Politically Exposed People, Commercially Exposed People and Media Exposed People) to be targeted first.
What Next and Voluntary Disclosure Programmes
Clients who have concerns or who have been advised by their banks or fiduciary managers to review their affairs should seek to regularise them now and not wait to see what happens. There are 46 voluntary disclosure programmes (VDPs) available globally; however, these programmes are only likely to be available for a short period of time.
How Can Dixcart Help?
Dixcart professionals are well aware of, and familiar with, the new information obligations, and can provide the following assistance:
- Guide and advise clients and implement structural, compliance and reporting changes to ensure historic regularisation of affairs and future compliance transparency.
- Review structures which have been advised on by other financial and fiduciary institutions and recommend action that needs to be taken to regularise matters and/or to ensure that the structures are compliant.
- Assist clients with introductions to specialist volunteer disclosure programme advisers and co-ordinate and liaise between advisers and authorities across each of the client relevant jurisdictions.
Please speak to your usual Dixcart contact or email: firstname.lastname@example.org if you need any additional information regarding CRS and the action that you should be taking.