Access to Beneficial Ownership Information

Access to Beneficial Ownership Information:The European Council has recently endorsed the proposal of providing access to tax authorities to beneficial ownership information.  This information is currently held by various authorities who are responsible for the prevention of money laundering and terrorist financing.

In the wake of the latest leak of information regarding the Panama Papers, this proposal is one of the number of measures set out by the Commission.A proposed directive will be requiring member states to make available access to beneficial ownership information of companies which will commence to apply as from beginning of 2018.

Access to Beneficial Ownership Information:Background and progress

Further to various media leaks such as the Panama Papers revealing mass concealment of funds to offshore countries as well as other similar revelations have led to increase in awareness and better understanding of measures that need to be taken and in which areas focus needs to be shifted.

In order to enhance tax transparency in recent years, the European Union has made significant progress and cooperation has been increased among tax authorities.  Furthermore, for the purpose of prevention of money laundering and terrorist financing, the recent amendments to legislation governing prevention pf anti-money-laundering have included tax crimes within.Furthermore, it has been recognized that transparency must be reinforced both at International and European levels.

Access to information

It is necessary for tax authorities to gain greater access to beneficial ownership information of corporate entities and other useful information for tackling tax crimes.The application of automatic exchange of information rules will be properly monitored.In certain cases, financial institutions are required to gather information from legal entities and report the relevant information to competent authorities held responsible for the prevention of money laundering and terrorist financing.In this way, tax authorities will be able to tackle effectively tax crimes.

What is the next step?

The European Council will adopt the proposed directive once the European Parliament will review and provide its opinion.