Britain, France, Germany, Italy and Spain have agreed to develop and pilot a system to make it easier to catch and deter tax evaders whereby a wide range of bank details of individuals will be automatically exchanged between the five countries, the U.K. Treasury said Tuesday.
The announcement comes as hundreds of thousands of UK expats in Spain panic as the deadline looms for them to inform the Spanish tax agency of all their assets based back in the UK, with potential fines being larger than the worth of the assets back home.
The countries aim to share information such as the name of bank account holders, their bank balance, details of payments into the accounts, addresses and birth dates, a treasury spokeswoman said.
Senior government finance officials from the European Union member states said in a joint letter to the European Commission that the pilot mechanism, which will be based on a similar model agreed with the U.S., will hopefully provide a template for a wider multilateral agreement.
“We would invite other EU member states to join in this pilot and we hope that Europe can take a lead in promoting a global system of automatic information exchange, removing the hiding places for those who would seek to evade paying their taxes,” they said in the letter to EU tax Commissioner Algirdas Semeta.
The letter was signed by French Finance Minister Pierre Moscovici, German Finance Minister Wolfgang Schaueble, Italian Deputy Finance Minister Vitorio Grilli, Spanish Budget Minister Cristobal Romero, and U.K. Chancellor of the Exchequer George Osborne.
“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,” David Gauke, the U.K.’s Exchequer Secretary to the Treasury, said in a statement.