Fredbargate

EU clears rules for ‘beneficial ownership’ registers

The ultimate owners of companies will have to be listed in central registers in EU countries, under new rules agreed by the EU Council and endorsed by the European Parliament yesterday.

Access to the register is restricted but will nonetheless be open both to the authorities and to people with a “legitimate interest”, including investigative journalists.

Gibraltar Chronicle - The Independent Daily First Published 1801

Gordon Barlow

That's interesting, Fred. We have the same requirement in Cayman - at least in theory. I can't see how it's going to work, myself. What's the situation when the beneficial owners of a company are a discretionary trust? I'm a long time retired from active administration, but I remember some of the wheezes that were in play when I were a lad (...). Here is what I wrote in one reminiscence a couple of years ago, about my time in Nassau. The BE monitors won't let me direct you to the actual blog-post, but these couple of paragraphs will give you an idea. Do you know if this sort of thing is still practised?

Each company-owning discretionary charitable trust contained a list of potential beneficiaries, who were liable to pay tax (in their home countries) on whatever distributions they received out of the trust’s income – namely, dividends received from the companies whose profit came from the fat contracts . Among those “discretionary” beneficiaries were family members of the star, as well as a regular charity, and sometimes the President of the USA or the British Prime Minister.

The companies did pay occasional dividends to their related trusts. But the only distributions ever paid out by the trusts – at the discretion of the trustees – were to the designated charities, and charities don’t normally pay tax. The President or Prime Minister were only ever there as a blind. Hey, Mister Tax Man! If you try to tax any of the named potential beneficiaries, we will distribute some money to those officials. Good luck trying to tax them. (I recall one trust that went so far as to name the Director of the IRS!)

Fredbargate

Reading it at face value there will be no hiding from the tax man if the company is in an EU country.

Will it work only time will tell.

But if one of the company's owners is a trust outside the EU ( Nassau ? ) then what will they be able to do about it ?

Lots of people will be looking at or for the loopholes.

Gordon Barlow

Yes, indeed. And my money is on the tax-dodgers and their lawyers, I have to say! Oh, also their parliamentary representatives and their corporate sponsors. One must never under-estimate the latter two groups' determination to receive and pay bribes offshore.

EMR

With greater UK and EU focus on corporations and wealthier individuals comes the news from Amazon that their policy is now to pay tax in the countries where their profits are generated and not through the low tax regime in Luxembourg.( BBC news)
Whether a response to consumer discontent or the threat of more sanctions it is a victory for common sense and the EU.

Dick Dasterdly

Deleted.
Wrong section