Tax fraud and money laundering is a global problem. One idea to tackle the issue is a Global Asset Registry. What is it?
In March 2019, the Independent Commission for the Reform of International Corporate Taxation (ICRICT) published a study to discuss a Global Asset Registry (GAR), a tool to battle wealth inequality around the world. ICRICT is a consortium of labor and civil organizations aimed at providing and discussing perspectives on global tax reform.
The more secretive the flow of money into offshore tax havens, the higher the likelihood of financial crime, money laundering, and loss of revenue to legitimate tax bases. Don’t get us wrong, our work as tax attorneys aims to reduce the tax burden of high asset individuals and corporations. As we have said before, there is an enormous difference between tax avoidance and tax evasion. Avoiding tax is typically a good idea, tax evasion is not.
At present, money laundering avenues circle the globe, running through secrecy jurisdictions, shedding tax liability, and moving wealth to the next tax haven before dropping it permanently under the radar. The resulting economic gaps threaten geo-political stability. There is a good reason to address global tax crime in a meaningful way.
ICRICT describes a GAR as a means to record, measure, and understand global wealth in a manner that allows proper taxation, regulatory authority, and offers a firewall against financial crime. ICRICT argues that real estate and land registries have been used to achieve accountability; the same principle could be used with a GAR.
ICRICT recommends establishing registries on a pilot basis, with fundamental guidance as follows:
- A registry would include information about the final owner of the asset, not a holding company or anonymous shell company.
- A GAR could include information on wealth, real estate, financial assets, gold, and other types of value.
- GARs could be used in particular financial regions, as a networked resource covering several regions, or a global registry. It follows that areas without registries will attract illicit investment. The EU is suggested as an initial financial center in which to start a GAR.
ICRICT estimates 45 percent of the profit of multinational companies finds its way into offshore tax havens. About 63 percent of the foreign profits of US multinational companies moves into the sometimes shadowy safekeeping of foreign bank accounts. By increasing accountability, GARs could provide a bottom-line to the problem of global wealth and economic inequity.
Is a GAR in your future? Not anytime soon. But the uptick in global money scandals and the increasing ability to capture data on missing money may press the issue in the not so distant future.
Speak with a trusted tax lawyer
Serving clients nationwide and abroad from offices in Cleveland and Chicago, the law firm of Robert J. Fedor Esq., LLC offers experienced guidance to resolve criminal allegations or tax litigation with the IRS. Do not let your future slip away. Contact us or call 800-579-0997 today.