Banks

Carney: UK is ‘investment banker for Europe’

The governor of the Bank of England has repeated his calls for a “smooth and orderly” UK exit from the EU, saying that a transition out of the bloc will happen, it was just a case of “when and how”. Responding to the BoE’s latest bank stress tests, where lenders overall emerged with more resilient […]

Continue Reading

Currencies

China capital curbs reflect buyer’s remorse over market reforms

Last year the reformist head of China’s central bank convinced his Communist party bosses to give market forces a bigger say in setting the renminbi’s daily “reference rate” against the US dollar. In return, Zhou Xiaochuan assured his more conservative party colleagues that the redback would finally secure coveted recognition as an official reserve currency […]

Continue Reading

Capital Markets

Mnuchin expected to be Trump’s Treasury secretary

Donald Trump has chosen Steven Mnuchin as his Treasury secretary, US media outlets reported on Tuesday, positioning the former Goldman Sachs banker to be the latest Wall Street veteran to receive a top administration post. Mr Mnuchin chairs both Dune Capital Management and Dune Entertainment Partners and has been a longtime business associate of Mr […]

Continue Reading

Banks

Financial system more vulnerable after Trump victory, says BoE

The US election outcome has “reinforced existing vulnerabilities” in the financial system, the Bank of England has warned, adding that the outlook for financial stability in the UK remains challenging. The BoE said on Wednesday that vulnerabilities that were already considered “elevated” have worsened since its last report on financial stability in July, in the […]

Continue Reading

Currencies

China stock market unfazed by falling renminbi

China’s renminbi slump has companies and individuals alike scrambling to move capital overseas, but it has not damped the enthusiasm of China’s equity investors. The Shanghai Composite, which tracks stocks on the mainland’s biggest exchange, has been gradually rising since May. That is the opposite of what happened in August 2015 after China’s surprise renminbi […]

Continue Reading

Categorized | Economy

Brussels to get tough on tax avoidance


Posted on April 21, 2016

EU Commissioner of Justice, Consumers and Gender Equality Vera Jourova speaks during a joint press a joint press conference on the subject of a Creating Digital Single Market at the EU headquarters in Brussels on December 9, 2015. The commission proposes modern digital contract rules to simplify and promote access to digital content and online sales across the EU. / AFP / JOHN THYS (Photo credit should read JOHN THYS/AFP/Getty Images)©AFP

Vera Jourova, the EU’s commissioner for justice, consumers and gender equality

    The EU commissioner in charge of corporate transparency said it was unacceptable that the wealthy can hide their money abroad to avoid paying tax, as Brussels stepped up its campaign against the aggressive avoidance revealed by the Panama Papers scandal.

    Vera Jourova said she was exploring ways to toughen existing rules aimed at forcing trusts and companies to disclose their true owners. These rules, agreed on last year, require nations to set up registers disclosing “beneficial ownership”.

    The existing legislation includes carveouts for trusts from important parts of the rules — meaning that, in some cases, they are not required to register their true ownership at all.

    “We have to look at the accessibility of the beneficial ownership registers and also look at the rules for trusts,” said Ms Jourova, EU justice commissioner. “We need to further increase transparency.”

    She added: “No ordinary citizen who works hard every day and pays taxes can understand why there are still ways for some people to hide their money from tax authorities. We cannot tolerate this — it is a question of fairness and justice in the EU.”

    The former Czech government minister — who said tougher rules would also help thwart the financing of terrorists and criminal groups — was speaking ahead of a meeting of EU finance ministers in Amsterdam on Friday, where tax avoidance will be discussed.

    Brussels’ plans could spark protests in London and Berlin. The carveouts for trusts were a big concession won by the UK in work on the 2015 law, while Berlin also pushed then to thwart demands for the information on companies to be made fully available publicly.

    No ordinary citizen who works hard every day and pays taxes can understand why there are still ways for some people to hide their money from tax authorities — it is a question of fairness and justice

    – Vera Jourova, EU justice commissioner

    But the leak this month of millions of documents from a Panamanian law firm, showing how it helped thousands of individuals to hide money offshore, has left governments reeling from criticism that they have not done more to tackle tax evasion.

    David Cameron, UK prime minister, has come under intense scrutiny after it was revealed his father had been a director of an offshore fund advised by the law firm, Mossack Fonseca. It later emerged he personally intervened in 2013 to stave off more ambitious EU transparency rules for trusts.

    At present, trusts only have to register if they are deemed to generate “tax consequences” — wording criticised at the time by the Austrian government as “too broad and highly prone to circumvention and evasion”.

    While countries have until the middle of 2017 to set up their central registers, Brussels is now calling for the work to be completed by the end of the year.

    However, the rules on how these registers can be accessed have also come in for criticism from tax campaigners as being open to interpretation.

    While they will be fully accessible to tax authorities, members of the public only have a right to examine them if they can demonstrate a “legitimate interest,” for example if they are an investigative journalist.

    In depth

    Panama Papers Leak

    The fallout from the data leak revealing widespread use of offshore financial centres by the rich and powerful is spreading

    Even these rules do not apply to trusts — a concession won by the UK which argued the role of trusts in managing issues around, for instance, inheritance would mean public access would allow unwarranted intrusion into families’ privacy.

    While the UK, along with Denmark, the Netherlands and Slovenia, is committed to making information on companies fully public, Germany has indicated that public access will be limited to “relevant specialist non-governmental organisations and specialist journalists”.

    In addition to toughening the transparency rules for shell companies and trusts, Ms Jourova also said she would reinforce other EU rules to tackle money laundering, including having better co-ordination of asset freezes across the bloc.

    “I will propose to make cross-border confiscation and freezing of these assets more effective so criminals can no longer hide their assets abroad,” she said.