Taxman investigates one million ‘secret accounts’ held abroad by Portuguese nationals … residents, and non-residents

One million ‘secret’ bank accounts held abroad by Portuguese nationals, foreign residents (and foreign non-residents) have ‘bobbed to the surface’ since banks in around 50 countries started ‘sharing information’.

Expresso reports that tax authorities in Portugal haven’t managed to get to all account holders yet, but 71% of those that have been contacted have now ‘regularised’ their situations, and are paying tax.

Says the paper, the 71% were high-earning citizens who had either “forgotten to declare their income from abroad, or who had declared a lesser income than that reported to the tax authorities through automatic exchange of information”.

Secrecy persists nonetheless in that Expresso was not given any information on what kind of sums these high-earning citizens had forgotten to declare, nor in which jurisdictions they had stationed them.

“What is certain is that the process is to continue”, says the paper, stressing “it is extremely long-winded”.

The ‘exchange of information’ involves banks supplying the names, addresses and dates of birth of nationals/ residents, and the names and addresses of companies – leaving authorities here with the task of cross-referencing data to discover fiscal numbers and verify amounts.

“The complexity of this process has implied the purchase and development of specific software which explains why the taxman albeit already in possession of information on the financial wealth that residents in Portugal held abroad at the end of 2016, 2017 and 2018, only recently started analysing and detecting incompatibilities for 2016-17, the first year for reporting”, explains the paper.

Expresso adds that exchange of information has also flagged monies held by foreigners who are non-resident in Portugal.

The mechanism has been a game-changer when it comes to tax evasion, and has seen other territories ‘come on board’ since it kicked off three years ago.

So far, France and Switzerland are the countries with the most number of accounts held by Portuguese, followed by the Cayman Islands, Hong Kong, Jersey and the Isle of Man.

While it’s still unclear what kind of values have been recovered for Portugal, Expresso was able to confirm that authorities “received information on 732,380 accounts held abroad by residents and reported on 401,002 accounts that non-residents have in the national tax system”.

On a European level so far the paper says this exchange of banking information has resulted in the recovery of 85 billion euros worth of tax.

[email protected]