EU Rules Combating Tax Evasion Have Loopholes Regarding Offshore Accounts - Reports

Fahad Shabbir (@FahadShabbir) Published October 15, 2018 | 05:52 PM

The rules adopted by the European Union to prevent individuals and companies from evading tax by hiding their money in offshore accounts may have loopholes, media reported on Monday, citing a report.

MOSCOW (UrduPoint News / Sputnik - 15th October, 2018) The rules adopted by the European Union to prevent individuals and companies from evading tax by hiding their money in offshore accounts may have loopholes, media reported on Monday, citing a report.

The EU member countries started exchanging information regarding the offshore accounts held by EU citizens and companies abroad since 2017, when the Common Reporting Standards (CRS) developed by the Organization for Economic Co-operation and Development (OECD) were first implemented. Under the CRS, the countries agree to share information about accounts opened by non-residents and thus prevent people and companies from hiding their assets from tax authorities in offshore accounts.

According to the report provided by the European Green party and obtained by The Guardian newspaper, the United States has agreed to share the information with other signatories of the CRS only partially and there are dozens of countries around the world who are not committed to the common standards, meaning that EU citizens can evade taxes by opening a bank account there under a company name.

The report also revealed that investors could hide their money from tax collectors in countries that are not committed to fully sharing information on offshore assets under the CRS and that allow individuals to obtain citizenship by investing large sums into the country, the news outlet said.

Moreover, under the current rules, countries have to share the information regarding only finances and not other types of assets, the outlet added.

The authors of the report have urged the bloc to make all tax havens and financial centers comply with the common reporting standards and slap them with sanctions if they fail to, the news outlet said.