How Far is Too Far in Terms of Tax Planning?

by | Dec 6, 2021 | AML Compliance Conference, Fiba Blog

In light of recent investigations by the International Consortium of Investigative Journalists, the question has arisen as to whether the world of international tax planning is about lawful avoidance or a shadow financial system that benefits the world’s most rich and powerful.

For decades industry professionals have helped multinationals and High Net Worth Individuals (HNWI) reduce their tax burden through the use of shell companies, trusts, and other offshore structures. 

Unlike bankers and other offshore middlemen, lawyers have not been subject to much scrutiny, in part because of attorney-client privilege, however, this could change. 

According to Sergio Álvarez-Mena, Chair of the Legal and Regulatory Affairs Committee at FIBA, and Chief International Counsel at Charles Schwab, “the Pandora Papers have spurred a legislative initiative in the US.”

Now lawyers’ responsibility and involvement, in helping clients legally reduce the amount of taxes they need to pay, have also been called into question.

“There is a difference between avoidance, which is structuring yourself in such a way that you pay fewer taxes, and tax evasion, which is criminal,” he said. Meanwhile, the Enablers Act, which has some similarities to the UK’s Corporate Responsibility Act, “will force entities outside the AML structure, like lawyers and trust companies, to be brought under the federal AML scheme,” he added.

During his panel at FIBA’s 2022 AML Compliance Conference in late February,  Álvarez-Mena will gather industry experts including tax planners, attorneys, and wealth managers to review the underlying ethical issues faced in tax planning, as well as the impact and repercussions of the Enablers Act.

“Discussing the ethics of international and offshore tax planning and structuring, we will have both those who structure the vehicles and those who manage the assets once they are in those structures, including different points of view which will spark a lively discussion about the ethics on tax management and where its limits lay.”

This and more will be covered during the three-day agenda packed with relevant discussions and presentations during the premier Anti-Money Laundering Compliance Conference of the Year!