G-20 to discuss combating tax avoidance
TOKYO — Measures to deter tax avoidance will be discussed at next week’s meeting of Group of 20 finance ministers and central bankers in light of the release of the Panama Papers, including expanding an information-sharing agreement to include Panama and other countries.
The release of leaked documents from a Panamanian law firm has had worldwide repercussions, such as U.K. Prime Minister David Cameron’s admission Thursday that he had held a stake in an offshore investment trust. Owning assets in tax havens is not inherently illegal but is often used to avoid taxes.
“It’s important to encourage many countries to participate in international standards” to prevent excessive tax avoidance, Japanese Finance Minister Taro Aso said Friday.
U.S. President Barack Obama has said he plans to discuss the issue with other leaders. Tackling tax avoidance will be a key item on the agenda at both the G-20 meeting kicking off Thursday in Washington and the Group of Seven summit being hosted by Japan in May.
About 100 jurisdictions, including some tax havens such as the Cayman Islands, have agreed to regularly share information on financial accounts among their tax authorities. When the arrangement takes effect — in 2017 for the earliest adopters — participants will automatically receive details of their citizens’ overseas accounts and transactions, allowing appropriate taxes to be levied.
G-20 finance ministers and central bankers will urge countries that are not yet involved, such as Panama, to sign on.