Finance Bill will force UK to try Azerbaijani tax evaders

Buried in the Bill, which was published in April, lies a clause entitled "International Tax Agreements" which outlines plans to share information with the tax authorities and prosecute tax evaders from other countries.

Experts in tax law say this provides the legal framework for the UK to join an existing pact between 11 countries established by the OECD in conjunction with the Council of Europe. The countries that have signed up to this agreement include Belgium, Denmark, France, Ireland, Italy, New Zealand, Norway, Poland, Sweden, the United States and Azerbaijan.

The pact, which Britain has avoided so far, obliges states to pursue tax evaders from other states if they are residing within their borders.

John Cullinane, the president of the Chartered Institute of Taxation, said the legislation as it stands could lead to the farcical state where Azerbaijani tax law was implemented through British courts.

"This clause worries us," said Cullinane. "We support the idea of hunting down tax criminals, but this has been brought in with no consultation.

"The agreement obliges one state to implement the tax law of another," he added. "That would be fine if it involved tax administrations we know much about. But what in the West do we know about Azerbaijan's tax system?"

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