One of the logical extensions of the ongoing
international campaign against offshore finance is the need for tax
amnesties to bring undisclosed assets onshore. Speculation on the
issue is increasing as details of potential schemes across Europe
leak out. William Cain reports.
Private bankers in Italy are convinced a tax amnesty is soon
to be unveiled in the country – an initiative which some say could
form the blueprint for a wider, pan-European campaign.
The case for tax amnesties is gathering momentum following the G20
summit, held last month, that outlined which financial centres were
compliant with international guidelines on tax and secrecy. The G20
nations are scheduled to meet again in Scotland this
November.
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“It’s unofficial at the moment, but it’s looking like it will go
ahead – the governments just haven’t put their finger on the send
button for the press release,” said one Italian source.
In an interview with PBI, Saverio Perissinotto, deputy CEO of
Intesa SanPaolo Private Bank, says he expects client inflows from
amnesties to kick in by the end of 2009.
Swiss private bankers have also indicated support for amnesties in
Europe. Eric Sarasin, managing partner at Bank Sarasin, interviewed
in the last edition of PBI, said undeclared assets were no longer
the future of the industry, and that banks needed to rethink their
strategy.
“Most undeclared assets came a couple of generations ago, and the
current generation wants a clean sheet of paper, rather than
running from the law,” he said.
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By GlobalDataMedia reports claim the Italian government has been asked to work
on a programme, based on its Scudo Fiscale I and II tax amnesties
of 2001-03, which can be adopted at a Europe-wide level. PBI
estimates the two amnesties raised $60 billion in total (see PBI
247) and are considered among the most successful in the last
decade.
OECD spokesman Nick Brey said amnesties could be a way of
“accompanying the discipline that is being enforced in terms of
offshore financial arrangements”.
But Maria Assimakopoulou, a European Commission spokesperson on
taxation and customs, said talk of a pan-European programme was
“nonsense” and that any potential amnesty was a matter for
individual governments.
Research by Merrill Lynch on the topic speculates a potential
Europe-wide tax amnesty would carry a tax on disclosed assets of
between 2.5 percent and 10 percent. The rate offered by Italy’s
Scudo Fiscale in 2001-03 was 2.5 percent.
“Importantly, the tax amnesty plan would also offer anonymity to
encourage tax evaders to repatriate funds,” said the research note,
written by analyst Derek De Vries.
“Participation in the tax amnesty wouldn’t be mandatory, but any
member EU state that wants to launch a tax amnesty would be
required to adhere to the EU plan.”
Participation in Scudo Fiscale involved filling out a specific form
with a bank and outlining the assets to be disclosed. The process
was entirely confidential, which contributed to the success of the
program, De Vries said.
One of the key determinants on the success of any initiative are
the terms in place for clients who are in a position to disclose.
One stumbling block could revolve around what clients are asked to
do with their assets once they are repatriated.
Governments are keen to funnel repatriated cash into government
bonds, given the huge amount of issuance which needs to take place
over the coming years to pay for financial bailouts and stimulus
packages. Earlier this year, it was reported Spain was looking at
giving wealthy individuals with undeclared money total immunity
from prosecution, provided they invested their funds in public
debt.
An article in Spanish daily El Mundo said a Royal Decree would
ensure the money could also be repatriated free of tax and that the
obligation for investors to identify themselves would be
cancelled.
