Q&As

Do you have a mutual anti-tax evasion facilitation clause for use in corporate transactional documents?

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Published on LexisPSL on 24/04/2018

The following Corporate Q&A provides comprehensive and up to date legal information covering:

  • Do you have a mutual anti-tax evasion facilitation clause for use in corporate transactional documents?

Do you have a mutual anti-tax evasion facilitation clause for use in corporate transactional documents?

The Criminal Finances Act 2017 (CFA 2017) came into force on 30 September 2017 and introduced into English law a new corporate offence of failure to prevent facilitation of tax evasion. There are two potential offences, which depend on whether the tax evaded is owed in the UK (UK tax evasion facilitation offence) or in a foreign country (foreign tax evasion facilitation offence). Each offence has three core ingredients, all of which must exist for criminal liability to arise, namely:

  1. stage 1: there must be criminal tax evasion by a taxpayer (either by an individual or a legal entity) under existing law

  2. stage 2: there must be criminal facilitation of that tax evasion by an ‘associated person’ of an organisation who is acting in the capacity of an associated person, eg an employee, agent or other person who performs services for or on behalf of the relevant organisation, and

  3. stage 3: there must be a failure by that same organisation to prevent the associated person from committing the criminal facilitation act

If stages 1 and 2 above apply, the organisation will be strictly liable for a failure to prevent a tax facilitation offence, unless

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