US reconsiders plans to tackle offshore tax evasion

The US has announced a significant change in the way it intends to crack down on offshore tax evasion, following mounting pressure from other governments and financial institutions.

Previously, it had intended to sign agreements with European leaders that would see their banks transferring data on accounts held by US citizens back to the Internal Revenue Service.

However, the Financial Times reports that concerns were raised such an approach would contravene privacy laws.

US officials have been holding talks with European authorities in Paris over the past week.

The news provider quoted the European Commission as saying: "The discussions with the US are very constructive and we're optimistic we'll be able to find a mutually acceptable solution that will make it possible to implement the Foreign Account Tax Compliance Act in a business-friendly way."

Banks have opposed the suggested rules, claiming they come with a heavy administrative burden.

In October, charity ActionAid suggested that 98 of the 100 largest companies registered on the London Stock Exchange take advantage of tax havens around the world through their subsidiaries.ADNFCR-2318-ID-801277633-ADNFCR