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European Tax Amnesties

January 4th saw the expiry of an official Revenue & Customs tax amnesty deadline, an attempt by the authorities to gather details of offshore accounts from more than 300 banks.

The 'New Disclosure Opportunity” (NDO), gives people the opportunity to be invited for interview in order to discuss the accuracy of their tax returns and enjoy reduced penalties for holders of secret offshore accounts in situations where significant disclosures should have already been made.

It's reported that for a variety of reasons response has on the whole been subdued. On one hand the Revenue's advertising campaign was relatively low key and there has also been a general lack of awareness of the scheme as the banks have sought to appeal against the disclosure rulings. The “non-domiciled” status of foreigners living in Britain also allows them to keep their offshore income out of the UK tax net. According to Stephen Camm, of PwC, 'The Revenue will be inundated with people saying they are non-doms.'

Some people may also have opted to move accounts to the more generous terms of a Liechtenstein-based disclosure opportunity which won't force account holders to pass on account details to the Revenue.

Tax amnesties are noting new. In Italy The Ministry of the Economy has announced an extension of the third Italian tax amnesty for undeclared funds held abroad as at December 31, 2008. The original expiry date was December 15, 2009; the new expiry date is April 30, 2010. So far the authorities claim that funds declared under the amnesty have reached over EUR 80bn (USD 114bn) a figure much larger than the total EUR 78bn repatriated under the first two amnesties.

In France too, French Budget Minister Eric Woerth has announced the extension of successful work carried out by the special tax unit to regularize illegal accounts of French residents. From January, any taxpayer seeking to legalize an account may contact the tax authorities and benefit from 'favourable conditions.' According to the Budget Minister, the special unit has already recovered more than EUR500m in taxation from around EUR3bn repatriated recently to France.

As ever, only the very best in professional international tax advice and guidance can navigate the waters of international taxation with maximum profitability and minimum risk.

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