TAX LAW NEWS: Tax Evasion Co-ordination between USA and Five European Tax Authorities

On July 26th 2012, a well received announcement was made of an agreement entered into between the US Treasury and the tax authorities of UK, Italy, Spain, France and Germany, for an international co-ordinated ‘crackdown’ on tax evasion or as it is better known in the USA, “tax-dodging”.

The Financial Times of July 27th, 2012 comments that this “paves the way for the US to exchange information on account holders” being citizens of the above-mentioned European States, “with tax authorities in those countries. They, in turn, are to share information on US account holders with the Internal Revenue Service.

US Treasury Secretary, Mr Tim Geithner, has been quoted to have commented that the agreement was an “important milestone in our joint efforts to combat offshore tax evasion and make our tax systems more efficient and fair.

It is to be remarked that the European Commission has recently observed that millions of Euros were remaining offshore, often unreported and therefore, untaxed, with the obvious consequences, that national tax revenue were being drastically reduced especially at this moment of international financial recession.

The relative agreement seems to be only the beginning and indeed, other countries, not being members of the European Union, may join in. The Cayman Islands, deemed to be one of the largest tax havens, have recently expressed serious interest in reaching a tax accord with the US, the Financial Times has reported.