Chancellor George Osborne pledged that a “groundbreaking” international deal will help tackle tax dodging and make it more difficult for wealthy individuals and businesses to operate without paying their fair share of taxes.
Britain, Germany, France, Italy and Spain – the EU’s five largest economies – have agreed to exchange information on beneficial ownership registers and new registers of trusts.
At a meeting of the International Monetary Fund (IMF) in Washington, Osborne said:
“Today we deal another hammer blow against those who hide their illegal tax evasion in the dark corners of the financial system.
“Britain will work with our major European partners to find out who really owns the secretive shell companies and trusts that have been used as conduits for evading tax, laundering money and benefiting from corruption.”
He added:
“It was Britain that led the world in pushing for the automatic exchange of personal tax data and encouraged the OECD (Organisation for Economic Co-operation and Development) to develop new rules for taxing multinationals more fairly.
“Since then dozens of other countries have followed our example.
“Now it is Britain and our European partners setting the pace on beneficial ownership transparency of not just companies but also trusts with a tax consequence – and I expect that the rest of the world will move to follow our example again.
“It shows the benefit of working together. No single country can tackle international tax evasion alone – and Britain should never fool itself into thinking that it can do this by itself,” Mr Osborne said.
The group is pushing for other major economies to help crackdown tax dodging.
The five countries are also urging other G20 members to follow suit as part of an effort to remove “the veil of secrecy under which criminals operate”.
The deal follows public outcry over the tax affairs of Prime Minister David Cameron, which were revealed as part of the leak of the Panama Papers – the leak revealed David Cameron profited from offshore investments held by his father, Ian Cameron, that were organised in part by the Panama-based law firm Mossack Fonseca.