In recent interview with the Bahamas-based Nassau Guardian, Managing Director of Leadenhall Bank & Trust, William Jennings, criticised the tax authorities of the United States and the United Kingdom for unfairly restricting the rights of offshore jurisdictions to conduct legitimate financial services.
Jenning’s comments come in the wake of a recent campaign by the Internal Revenue Service to pursue US individuals attempting to avoid domestic taxes by using credit cards issued by offshore banks. In March, the IRS filed summonses against several clients of Leadenhall after the individuals concerned refused to cooperate with a prior request by the agency to scrutinise their accounts. Mr Jennings however denies that the IRS has contacted the bank concerning the matter.
“We have not been contacted by the IRS or any other government agency,” Mr Jennings told the Guardian. “People from all over the world, not just the United States, have accounts in jurisdictions outside their home countries, and for many reasons, which have nothing to do with mitigation of taxes.”
Jennings accused the US and UK of maintaining double standards on the issue, and pointed to the numerous banks such as JP Morgan, Chase Citibank and Barclays that have banking and credit cards clients around the globe, and that have “far more US clients than we do.” The Leadenhall MD said it was a basic right in a free world for a person to arrange his finances in the way they saw fit within the law of the country concerned.
“The UK is probably still one of the largest tax havens in the world, based on the distinction it makes between domicile and residency,” claimed Jennings in the NG interview, adding: “The US offers huge tax and other concessions to foreign companies locating to the US and to US exporters, which by world trade organisations are considered as illegal subsidies.”
The IRS recently published the preliminary results of its Offshore Voluntary Compliance Initiative (OVCI) which saw over 1,200 individuals come forward and identified some 80 ‘illegal tax shelter’ promotion firms.
By Amanda Banks. Tax-News.com
