6th January 2017
The world is getting smaller. Not literally of course, but for those seeking to hide money in global tax havens, the options are certainly shrinking. As we’ve previously highlighted, the introduction of the Common Reporting Standard – which over 100 states have already signed up to – will see greater tax information sharing across borders. This action has been initiated to crack down on tax evasion and the use of offshore havens from individuals and businesses alike.
More countries sign up to the Common Reporting Standard
The latest country to sign up to this agreement is Switzerland – perhaps well known in the tax field for its anonymous bank accounts that have, in the past, been favoured by criminals and wrong-doers from all backgrounds.
As of this year, authorities in the country will begin collating the required data and will share this information annually from 2018 onwards with those states also signed up to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
This move follows announcements from the likes of Panama and the Bahamas of their commitment to greater sharing of information in order to halt the growing trend of tax evasion that has been noted across the globe.
For Switzerland, this move is slightly unsurprising given the pressure authorities have faced recently. In 2008, Swiss bank UBS faced investigations of fraud from the US Federal Bureau of Investigation and French authorities are investigating severe money laundering allegations which have allegedly uncovered large scale abuses of the system.
Other Swiss banks have also been found to have helped American clients avoid paying US taxes and have since paid over $5 billion in penalties as a result.
The impact on contractors
As the likes of Switzerland, Panama and the Bahamas join the fight against tax evasion, there can be no doubt that anyone failing to pay the correct rates in their country of residence and the location they operate in will face the full wrath of the law. Whether you are a contractor working across borders or a recruiter placing them around the globe, you could be liable for any errors in tax calculations. To mitigate this risk, speak to the expert 6CATs team today.