Ownership transparency

One of the key challenges in the fight against tax avoidance, evasion and money laundering is the ease with which individuals can use opaque legal entities such as shell companies and anonymous trusts to hide their assets and wealth from the world’s tax authorities. This once again became apparent to the world when the ‘Paradise Papers’ scandal surfaced in November 2017. For example, the leaked documents allegedly demonstrated how wealthy individuals use anonymous ‘mega-trusts’ to conceal large quantities of assets in tax havens. In addition, the leaks illustrated how secret shell companies, foundations and similar structures in secrecy jurisdictions can be used to hide wealth.

Public registers showing the real owners (known as ‘beneficial’ owners) of companies, trusts and similar legal entities will put an end to this problem.

Image source: Eurodad/Arnaud Ghys

In recent years, a number of European countries have pushed ahead and introduced such public registers, and at the EU level, there have been intense negotiations about whether to introduce public registers in all EU countries.

In December 2017, the European Commission, Parliament and Member States finally reached agreement on introducing public ownership registers for companies and for some trusts. While loopholes remain, especially regarding secret ownership of trusts, this agreement constitutes a major step forward.

The report Tax Games – the Race to the Bottom maps and rates the positions of 18 European countries, as well as the European Commission and Parliament, on the issue of public ownership registers for companies, trusts and similar legal structures.

Click here to see a summary of the ratings.

The criteria for the rating can be found here.

To read the full report (including sources and references) click here.

Image on the main page source: Eurodad/Arnaud Ghys