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Cameron warns overseas territories on tax

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24th May 2013
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Prime Minister David Cameron has urged British overseas territories to "get their house in order" and sign up to international treaties on tax aimed at combating tax evasion and aggressive tax avoidance.

He wrote to 10 territories and crown dependencies, including the Cayman Islands and the Isle of Man, which both operate low-tax regimes.

The plea came ahead of a G8 summit in June, when the UK is expected to push for international agreement on tighter tax measures to make it harder for individuals and big companies to pay little or no tax.

"With one month to go, this is the crucial moment to get our own houses in order," Cameron wrote.

"I respect your right to be lower tax jurisdictions... but lower taxes are only sustainable if what is owed is actually paid."

The 10 territories that received the letter are Bermuda, the British Virgin Islands, the Cayman Islands, Gibraltar, Anguilla, Montserrat, the Turks and Caicos Islands, Jersey, Guernsey and the Isle of Man.

Governments have agreed tax amnesties and agreements to share tax information more easily between countries and tax havens, making it harder for people to hide their cash in bank accounts.

But without international agreement on tax rules it will be hard to stop individuals and companies playing off one country against another.

Following the recent controversy about the firm's transfer pricing strategies, Google's executive chairman Eric Schmidt recently defended the company's tax affairs. He did agree however that international law could “almost certainly benefit from reform".

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