In between BBC appearances (I think there will be 5 today) I note that Christian Aid have commented on the UK / Liechtenstein deal, saying:
The UK government’s new tax deal with Liechtenstein amounts to a welcome admission that much-hyped tax information exchange agreements (TIEAs) do not work, Christian Aid says today.
‘The fact that the UK has signed two agreements today — a TIEA and a second one, ensuring that uncooperative UK taxpayers have their Liechtenstein accounts shut down - is a clear sign that TIEAs are almost impossible to use,’ says Christian Aid Policy Manager Alex Cobham.
‘They are extraordinarily bureaucratic and riddled with get-out clauses. If TIEAs were an effective way for tax authorities to combat tax dodging, then there would have been no need for the second agreement.
‘Now that the UK has acknowledged that it needs more than a TIEA to crack down on its own tax dodgers, we hope it will apply the same logic to developing countries. Their tax authorities have far fewer resources than our own in the UK and are therefore even less able to use TIEAs to collect the revenues that are rightly theirs.’
Christian Aid estimates that developing countries lose at least $160 billion a year to tax dodging by multinational companies alone.
Mr Cobham adds: ‘The G20 should now reflect this acceptance that TIEAs do not work by urgently bringing forward a new multilateral agreement on tax information sharing. Information must be exchanged automatically, to ensure that developing countries benefit.’
I think the point that the second deal proves that the TIEA does not work is absolute valid.
And I see no way that a deal of this sort will be offered to a developing country so Christian Aid are right to complain on that score.
And there’s no doubt, Automatic Information Exchange is the only way forward: it’s AIE that puts the E into TIEA. Without it the prospect of Exchange is minimal.
And that’s what continues to worry me.
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“Their tax authorities have far fewer resources than our own in the UK and are therefore even less able to use TIEAs to collect the revenues that are rightly theirs”
Though, at the rate Gordon is cutting back on HMRC offices and staff, the playing field could be levelled out before too long…
Ha! Liechtenstein obtains maybe 1% of its business from UK. The UK agreement is just a show piece.
The bulk of business comes from Germany, Austria and Italy. If Liechtenstein inks similar agreements with these countries, then I’ll eat my hat.
And just how much undeclared business left Liechtenstein and Switzerland for Singapore in the past 12 months to pre-empt such a move ? Clearly tens of billions. Look at the Singapore bank deposit figures and look at how much the Swiss banks in Singapore have grown.
I think the attack on Liechtenstein will produce only a fraction of what the UK expects from it. They need to be looking several thousand miles to the east.
We’ll get there
These things take a step at a time
But progress is happening
You should be sweating
@Mark
See today’s FT ‘Liechtenstein in talks with Germany on transparency’. Hope that hat’s tasty.
Not sweating at all Richard.