However, it is reasonable to ask whether international efforts for the automatic exchange of information (AEOI) strike an appropriate balance between the objective of eliminating tax evasion and the legitimate concerns of individuals concerning their privacy and safety.

The use of planning techniques to lawfully minimise taxation combined with honest tax reporting is very different from illegally hiding assets and income to avoid accurately reporting to tax authorities. However, those who pay higher tax rates may be forgiven for begrudging those with the resources to structure their affairs utilising lower tax jurisdictions, potentially only further increasing the substantial proportion of global wealth held by a tiny proportion of the population. The Tax Justice Network, a tax research and advocacy group, estimates that offshore financial centres (OFCs), many of which are United Kingdom (UK) dependencies or territories, hold USD21 to USD32 trillion of individuals’ financial assets.

Governments and media have described tax avoidance as a moral evil, often distinguishing between aggressive and ordinary tax planning. However, taxpayers cannot be expected to comply with subjective notions of morality.

Rather, the imposition of tax through application of clear laws should be the objective. In order to implement appropriate tax laws, governments may require information regarding the transactions and entities that their residents benefit from locally and abroad. The Organisation for Economic Cooperation and Development (OECD) and many governments are concerned that OFCs attract foreign investment by: imposing low, or no income or corporate taxes on foreign investors; and facilitating foreign investors to keep their identities and financial affairs private.

Read More

Share
Twitter LinkedIn Email Save as PDF
More Publications
20 Dec 2021 |

A Time Of Regeneration: Bermuda Can Bounce Back Better

Bermuda’s economy is a mixed bag of emerging opportunities and specific challenges. But if all sec...

17 Dec 2021 |

A Rising Tide: And Ships Are Choosing Bermuda

Bermuda must remain innovative, nimble and wary of too much regulation to stay ahead of the game, ac...

17 Dec 2021 |

A Silicon Valley For ILS

As the ILS market continues to innovate and evolve, driven by external forces including ESG, it will...

3 Dec 2021 |

Americas Restructuring Review 2022

This chapter discusses the defining features of Bermuda’s insolvency landscape and the primary ins...

2 Dec 2021 |

A growing hub for the life sector

Bermuda has become a flourishing focal point for long-term insurance and reinsurance, offering the I...

2 Dec 2021 |

Provisional liquidation in Bermuda and the selection of provisional liquidators

In the absence of a formal equivalent to English administration proceedings or U.S. Chapter 11 proce...

Contributors: Sam Riihiluoma
30 Nov 2021 |

Cryptocurrencies and estate planning

When a person dies having made a will, their personal estate is transferred to their personal repres...

26 Nov 2021 |

Whistleblowing issues for employers

In recent years there have been a number of high-profile scandals brought to light by the actions of...

24 Nov 2021 |

Hong Kong Harbours Long-Term ILS Ambitions

The launch of Hong Kong’s first catastrophe bond signals the start of a new era for Asia’s insur...

4 Nov 2021 |

The Insolvency Review – Ninth Edition

The ninth edition of The Insolvency Review offers an in-depth review of market conditions and insolv...