“While this is to be applauded on many counts, it is important to recognise there is a great deal of difference between secrecy and privacy, and we need to be careful that jurisdictions can continue to protect the interests of our clients,” said Stewart Fleming, group managing director at Abacus, which also operates in Malta.
He added that privacy is an “essential element” for advising clients in offshore jurisdictions, warning against what he described as “unnecessary intrusion”.
“It [privacy] is our hallmark, and while we clearly need to ensure we follow all relevant legislation and regulation, we also need to guard against unnecessary intrusion into legitimate financial arrangements,” he said.
Panama Papers
Fleming said there has been a considerable shift in the perception of ‘offshore’ over the last four decades, particularly after the leak of millions of documents from Panamanian law firm Mossack Fonseca – uncovering how the rich and powerful around the world use offshore companies to avoid paying tax.
“This has led to an increasing amount of tax legislation over the years and the continued drive towards more transparency,” he said.
Increasing transparency
Following the scandal, British prime minister David Cameron revealed that all crown dependencies and overseas territories will now provide company ownership data to UK tax and law enforcement authorities.
Last week, the Isle of Man and Gibraltar joined Europe’s five largest economies — Germany, Britain, France, Italy and Spain — and 17 other jurisdictions in signing up to a confidential beneficial ownership register which would automatically share information on the ultimate owners of companies.
‘People need privacy’
The comments are similar to those made by George Bull, a senior tax expert at audit and tax advisory firm RSM, last week.
Bull told International Adviser that governments need to set out clear guidelines around what the transparency measures will achieve.
He argued that although “transparency will deter certain behaviours”, privacy is still important.
“People need privacy it’s a form of respect. It’s really difficult when we start saying that everyone ought to disclose everything and I don’t like the place that takes us to.
“We need to figure out the transparency of what information, for what purpose. Is forcing a person to disclose something a social good?” he said.
