German Finance Minister Wolfgang Schäuble on Sunday (10 April) pleaded for countries to work together in the fight against tax cheats and money launderers by sharing national lists naming the beneficiaries of shell companies.
The proposal is part of a 10-point plan by Schäuble, detailed in the Handelsblatt and Die Welt newspapers, to clamp down on tax havens in the wake of the “Panama Papers” scandal which revealed how offshore companies are used to hide wealth.
“The registers should be drawn up at the national level and linked up,” Schäuble told ARD television.
Countries who refused to share tax-related information should face penalties, he added. “We would put them on a blacklist and certain financial operations would no longer be possible with them.”
Journalists and non-profit groups should also have access to the information, he said.
The European Union has already set out to work on a joint blacklist of such tax havens, according to Handelsblatt.
“We need total transparency,” Schäuble told Bild, adding that he intended to present the plan in the coming week.
The minister told German media however that he was not calling for a ban on anonymous shell companies.
His action plan also moots ending Germany’s statute of limitations for tax fraud. “Tax evaders should no longer be able to find shelter in the statute of limitations,” the document says.
The head of the Organisation for Economic Cooperation and Development (OECD) Angel Gurria earlier this week called Panama “the last major holdout” allowing funds to be hidden from tax and law enforcement authorities.
The Central American nation has since said it was prepared to step up its exchange of information with the OECD.
The "Panama Papers" controversy has shone a global spotlight on tax evasion after 11.5 million documents were leaked from Panamanian law firm Mossack Fonseca detailing the offshore financial dealings of the rich and powerful.
The revelations have prompted a number of governments to launch tax fraud and money laundering probes.
The fight against tax evasion is one of the Juncker Commission's main priorities. News of the systematic, state-sanctioned tax evasion practices of many multinationals based in Luxembourg, known as the Luxleaks scandal, broke shortly after the new Commission was sworn in.
On 18 March 2015, the executive presented a package of measures aimed at strengthening tax transparency, notably by introducing a system for the automatic exchange of information on tax rulings between member states.
The so-called Tax Transparency Package will force the EU's 28 member states to share details of any tax deals agreed to with some of the world's biggest multinationals, in information sent automatically every three months. The plan aims to end the secrecy that allowed member states to often compete against each other to attract business and investment.
It does not however question the perfectly legal practice of offering companies tax rulings, the executive said, this being the strict responsibility of member states.
Activists criticised the fact that the tax ruling would remain out of the public eye, remaining privileged information for tax authorities.
An updated directive on the automatic exchange of information between national tax administrations received the green light by the EU’s 28 finance ministers on Tuesday (8 March).
- European Commission: Tax Transparency Package