SECRET MONEY - G8 and Tax Havens - TrustLaw


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SECRET MONEY - G8 and Tax Havens

Has the G8 pulled back the veil on tax havens and dirty money? Raffaele Russo, OECD tax expert; and Heather Lowe, counsel at Global Financial Integrity; Tom Bergin, Reuters correspondent

  • Hi everyone and welcome to Thomson Reuters Foundation online chat on Secret Money - Has the G8 pulled back the veil on tax havens and secret money? We have some great guests lined who are real experts in the field. We'll kick off in just under 10 minutes.
  • A quick summary of what the G8 agreed: 1) Companies should disclose the tax they pay on a country-by-country basis; 2) Countries pledged to improve the transparency of shell companies and trusts, delivering action plans on how they'll go about it; 3) Tax authorities should automatically exchange tax information to fight tax evasion
  • Let's get started. Welcome to our experts who have joined Thomson Reuters Foundation to explain what the G8 action on taxes and transparency really means: Does it draw back the veil of secrecy? May I invite Raffaele Russo at OECD to start by introducing himself and tell us the work you are doing on taxes
  • JEFFREY ROBINSON: As someone who has spent two decades writing for and speaking to an international audience about the offshore world, money laundering and financial crime, I come to the G8’s plan with enormous skepticism. Real action is long overdue. Instead, we got a glass, not half full, but mostly empty. To begin with, none of the member states actually needed to wait for the G8 to act. Mr. Cameron, for example, could have long ago waved his pen at Parliament and written laws that would make a difference. The fact that he’s never bothered tells you where his heart really is. Next, that the press release (should... pledged... should) was written before the session on tax avoidance/evasion even began, says everything about the lack of political will to hold a genuine debate. But the thing that strikes me most about this is, that without penalties for non-compliance, there will never be any compliance. We’ve seen this same hollow rhetoric when it comes to money laundering legislation and regulations governing PEPs (Politically Exposed Persons.) And, please, don’t even try to pretend that those problems have been dealt with adequately. So tell me, where are the penalties for non-compliance with the G8 plan? And if the answer is, that will have to be determined by the member states, then don’t act surprised when, a year from now, the world is in the same sorry state and us skeptics are saying, we told you so! / JR
  • Thank you Stella. I am a Senior Advisor at the OECD Centre for Tax Policy and Administration (Paris), where I currently coordinate the work on Base Erosion and Profit Shifting (BEPS). Until recently I led the work on Aggressive Tax Planning and on Tax Crimes, worked on the Model Tax Convention and Transfer Pricing and helped updating
    the Multilateral Convention on Administrative Assistance in Tax Matters.
  • Love those acronyms - BEPS! Thanks and welcome Raffaele. Heather Lowe at Global Financial Integrity, would you like to introduce yourself and your work?
  • Thanks very much, Stella, I’m happy to be here today. I am Legal Counsel and Director of Government Affairs for an organization called Global Financial Integrity, or GFI, based in Washington, DC. GFI’s mission is to curtail illicit financial flows from developing countries in order to spur growth in those countries, and we focus on how policies in the international financial centers like the U.S., London, and other tax havens encourage that capital flight. Among other things, we advocate for automatic exchange of tax information among countries, the country by country reporting of key financial indicators by multinational companies, and getting rid of anonymous shell companies around the world. These are three of the key topics of focus for the G8 this year. GFI is a member of the US-based FACT (Financial Accountability and Corporate Transparency) coalition, Publish What You Pay USA, and the international Financial Transparency Coalition.
  • Great - FACTS are what we are all after here. Hi Tom Bergin at Reuters. Would you explain the reporting you are doing on corporate taxation?
  • Hi, I am a Reuters specialist correspondent and for the past year I have been involved in a series of tax investigations of companies including Starbucks and Google which have led to parliamentary investigations here in the UK. our aim was to highlight how the tax system works in practice and to illustrate areas that may be weaknesses and which may warrant legislative changes
  • Let me start by asking Raffaele Russo. A central part of the G8 plan is country-by-country reporting by corporations and the OECD has been tasked with coming up with a plan to implement this. How can this be achieved?
  • Sure Stella. But let me start with a general comment on the G8 and the reactions it is generating today.
  • Those complaining about the G8 outcomes sound like the manager of a football team who complains because his/her team only won 4-0 while it could have been 5-0. We congratulate the G8 for putting its full force behind international efforts to bolster sustainable growth through global solutions to tax evasion and avoidance. now about CBC.
  • CBC is a big one. We see this as a typical win-win situation, less cost for business to report, more useful information for tax administrations. Now I understand some would like to scrutinise MNEs tax accounts, but tax authorities are there for a reason.

    CBC is going to be a core part of the BEPS action plan and I am confident that we will deliver a useful plan to the G20 in July. The devil is obviously in the details and we are paying attention to that as we speak, well .. write.
  • A big question though is -- will this information be made public? Or is it just another collection of data by government with little public accountability. What is OECD's view on how to structure it?
  • Can I add to that? Rafaelle – I think the team dropped the ball on country by country reporting. It is limited to tax information and it is not public disclosure. Taking tax information out of the greater financial context of a company’s international operations fails to grasp the point. The OECD and the G8 have not supported public disclosure of the information. What method does the OECD plan to use to determine whether the measures it recommends are, in fact, effective? Will the public have access to any of the information that informs their determination?
  • Waiting for some good discussion
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