Combatting Offshore Tax Evasion After Brexit EmilDuvessa SondajBandeen, Han Juliette Bowen, Mark O’Brien, Will Melling and Zeki Dolen Emil Sondaj Hansen,
I.
INTRODUCTION
The last decade has seen a renewed and unprecedented push against the offshore tax limitation strategies of large corporations and wealthy individuals. The financial crisis of 2007-8, wave of anti-globalist sentiment in the latter half of the 2010s, and singular events such as the Panama paper leaks, have put continual pressure on governments to act to defend their tax base. This paper examines international policies to curb offshore tax evasion, and specifically considers the role and effects on Britain in the wake of its exit from the European Union this year.
The UK has played an historically important role in facilitating offshore banking. To a large extent rooted in the City of London during the 1950s (as part of the formation of the Eurodollar market avoiding British currency controls), offshore tax evasive practices have developed over the last half century. As the British Crown Dependencies, Overseas Territories and former British colonies became involved, a network of offshore centres connected to financial hotspots in Western countries, particularly London, developed.
Globalisation and the democratization of trade has abetted, rather than limited, this network. As the structure of multinational companies has become harder to delineate in the wake of globalisation, so too has the distinction between legitimate economic activity and mendacious tax limitation.
In the wake of the 2007-8 financial crisis, which buoyed public opinion against perceivably abusive financial and multinational companies, politicians looked partly to curbing offshore tax evasion as a way of tackling hefty fiscal deficits. This led to legal innovations, such as ‘FATCA’ in the US and the OECD’s Common Reporting Standards, which have both had some success in reducing the offshore accounts of domestic companies and individuals. These will both be examined.
The Wilberforce Society Cambridge, UK
www.thewilberforcesociety.co.uk
8
February 2021
