Group of Eight leaders have agreed measures to go after money launderers and corporate tax avoiders, an issue that has seen the UK government, for example, come up against the US-headquartered Starbucks over the latter’s use of structures to minimise tax paid to the UK.

Measures agreed at the G8 include requiring shell companies to identify their effective owners. Governments also agreed to give each other automatic access to information on their residents' tax affairs.

Among the items listed in the G8 communique were as follows:

-- Tax authorities across the world should automatically share information to fight the scourge of tax evasion;

-- Countries should change rules that let companies shift their profits across borders to avoid taxes, and multinationals should report to tax authorities what tax they pay where;

-- Companies should know who really owns them and tax collectors and law enforcers should be able to obtain this information easily;

-- Developing countries should have the information and capacity to collect the taxes owed them – and other countries have a duty to help them.

Isle of Man

The government of the Isle of Man, meanwhile, yesterday issued an action plan that it said built on its aim to work at an international level to stamp out tax evasion and fraud. The move came as the jurisdiction’s officials met with Group of Eight leaders discussing tax transparency, among other issues.

The plan “outlines the island’s position on tax information exchange and the identification of corporate beneficial ownership, and sets out the steps it is taking to advance this key global agenda”, the IoM government said in a statement.

The comments chime with those given by the likes of the British Virgin Islands and the Cayman Islands, which have seen their status as tax havens attacked by countries fearful about the exodus of tax revenues.

The Isle of Man said its Action Plan was issued alongside other nations attending the G8 Summit in Lough Erne, Northern Ireland, and is designed to build on agreements reached over the weekend where transparency in financial affairs was a key issue.

The issue of disclosing the "beneficial owners” of companies, trusts and other structures is controversial. While on the face of it this might seem an innocuous idea, it raises questions about whether legitimate privacy concerns might be at risk when owners reside in countries with insecure protection.

“The Isle of Man’s Action Plan endorses international standards against money laundering, the financing of terrorism and proliferation, tax evasion, corruption and related criminal activity,” the country’s government said.

The Isle of Man's action plan outlined the following steps:

Co-operation with an external assessment of the island’s compliance with all relevant international standards in the legal, financial and law enforcement sectors; conduct a national assessment of money laundering and terrorist financing risks; review its existing provisions on beneficial ownership and consider whether the introduction of a centralised registry would improve transparency of the ownership and control of companies in the Isle of Man; continue to play an active role in organisations which promote international cooperation to counter illicit financial flows, and continue to negotiate and enter into international tax cooperation agreements.

Meanwhile, the Taxpayers’ Alliance, a campaign group, criticised the G8 meeting and its posture on tax evasion and avoidance.

“This summit was a distraction which was never going to address the root cause of British public disquiet over tax avoidance: our hideously complex tax code.

“The way to ensure that all companies and individuals pay their fair share of tax here in the UK is for the politicians at Westminster who created our tax system to simplify it by scrapping the loopholes they introduced and ensuring that tax rates are competitive. Only then will people again trust that everyone is paying what is due,” Matthew Sinclair, chief executive of the organisation, said. “Transparency is important, on the part of both tax authorities and multinational companies. But it is also vital that there is tax competition between different nations, because that pushes down overall tax rates for families and businesses alike,” he added.