The government has signed an agreement to exchange tax information with France, Germany, Italy and Spain in an effort to catch and deter tax evaders.
Under the agreement, banks in the five countries will have to reveal financial details of foreign clients and give them on to the person’s domicile tax authority to help it check for tax evasion.
The agreement, described as a pilot, is an attempt to co-ordinate international action by against tax evasion and minimise costs for governments and businesses.
Exchequer David Gauke said: “This is an important further step in the fight against tax evasion and represents the next stage in promoting a new standard in the automatic exchange of tax information. This builds on the agreements we have reached with the Isle of Man, Guernsey and Jersey and the discussions currently underway with the Overseas Territories.”
The government has made similar information-sharing underway with the Overseas Territories.
Separately, the UK has signed new double taxation conventions with Norway and Spain, while a similar agreement with Ethiopia has come into force.
The Norway tax convention includes the latest OECD provisions on business profits, exchange of information, assistance in collection and arbitration.
The Spain convention includes “substantial” benefits for companies, pension schemes and individuals. The dividend withholding tax rate in the existing treaty is 15% for portfolio investors and this will be reduced to 10% for portfolio investors and to zero for direct investors and pension schemes.