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War on Want singles out Bermuda as secretive tax haven

Google: Using Bermuda entity to reduce its tax bill

A UK-based international charity has singled out Bermuda in its campaign to crack down on offshore ‘tax havens’.

War or Want picked on Bermuda after reports that internet giant Google had increased to $6 billion the amount funnelled through the Island to avoid tax.

And it accused the UK government of “hypocrisy” in calling for more international action to tackle tax avoidance — but failing to act to deal with tax arrangements in its own Overseas Territories.

War on Want also said that the Island had no registers of company ownership and no requirement to file company accounts.

The charity’s tax campaigner Murray Worthy said that tax avoidance by major companies was responsible for “denying Britain funds amid savage cuts in jobs and vital public services, like healthcare and education, and growing poverty and inequality”.

Mr Worthy said: “Google’s multibillion pound business is able to avoid taxes in the UK and around the world because of the secrecy and low tax rates offered by Bermuda, a territory that the UK ultimately has responsibility for.

“Cameron declares there are too many tax havens, too many places where people and businesses manage to avoid paying taxes.

“Yet at the same time, he refuses to eradicate Britain’s own global network of tax havens.”

Mr Worthy was speaking on the eve of an Overseas Territories’ Joint Ministerial Council, which will focus on promoting economic growth and job creation in Britain’s overseas possessions.

The Ministry of Finance yesterday did not respond to requests for comment.

But a spokeswoman for the Bermuda Monetary Authority (BMA) Bermuda has been a long-term proponent of ‘know your customer’ and that regulated firms like banks or insurance companies were required to file reports on their finances.

She added: “Anyone who wishes to establish a company here has to be vetted. The BMA does that on behalf of the Minister of Finance. All beneficial ownership information is kept.”

And economics expert Peter Everson, who sits on the economics committee of the Bermuda Chamber of Commerce, said that registered offices of overseas firms were required to keep a register of shareholders — although it might not be publicly available.

He added that the Registrar of Companies, which works closely with the BMA, also vetted shareholders in Bermuda companies.

And Mr Everson said that War on Want was “shooting itself in the foot” by linking secrecy with not filing company accounts.

Mr Everson said: “If you are a regulated entity like a bank or insurance company, you have requirements for your licence — but a regular company doesn’t have to file accounts.

“War on Want is shooting itself in the foot if they are talking about Google — if Google has a company it’s owned by the parent company. It’s a public company, so they have to file a company report for the parent company which is a public document and that incorporates the results for the Bermuda company.”

War on Want said that Google funnelled $6 billion through Bermuda in 2012, a quarter more than in 2011, diverting 80 percent of its profits worldwide.

It added that the company was said to have sent $2.6 billion in UK profits through the Island, reducing its tax bill in Britain to $200 million while globally avoiding a total of $1 billion in tax.

And War on Want added the conference was “window dressing” and added the UK government had “ducked the need for legislation to kill off tax abuse”.

Mr Worthy said: “Rather than ignoring the facts and pretending these places aren’t tax havens, the government should be using this summit to finally tackle the UK’s devastating network of tax havens that enable the global scourge of tax avoidance and evasion.”

War on Want estimates that around $20 trillion was held by rich individuals in “secrecy jurisdictions” — a sum equal to 13 times the annual output of the UK economy.

The charity said that — if that money was taxed — it could generate as much as $180 billion in revenue.