The automatic exchange of financial information was signed at a conference in Berlin at the end of October. A total of 51 countries signed the agreement which is going to be put in place from 2017 in most countries, and in other countries later. Among the countries that have signed the agreement are some of the most popular countries for tax evasion: Lichtenstein, the Virgin Islands and the Cayman Islands.
The pact contains the exchange of all a bank account data of private persons. This should make it easier for financial authorities to control the assets that are flowing into accounts abroad, and to minimise tax evasion. The German minister of finance, Wolfgang Schäuble, said that tax evasion will not be worthwhile anymore with this pact. However, it will still be possible to save taxes with companies abroad, and he sees room for improvement in this field as well. Since the agreement only concerns private accounts, company accounts are still subject to banking secrecy, and this data is not exchanged.
There were many states signing the pact in the last minute. Now it is up to the authorities to ensure that the rules are followed. There were already 24 countries exchanging banking secrets before this global agreement, and it helped Germany to gain 37 Billion in taxes in just 5 years. This situation should now improve for all countries.
The enforcement of the agreement will make it obligatory for banks and other financial institutions to provide information about dividends, interest, bank accounts, assets, and other income if the beneficiary lives abroad. This will mean that banking secrecy does not exist any longer.
Our team at the office of Dr. Werner & Partner welcomes this step. Offshore companies and accounts have been misused for too long. We can establish company structures that can reduce the tax burden and can be reported to financial authorities without any problems. A legal reduction of taxes is for example possible through a move to Malta in combination with an offshore company. This is a legal instrument to permanently lower the tax burden, and we can help our clients to achieve this. If you are interested, and would like more information, you are welcome to contact our office for a personal consultation.
