SCOTLAND is being advertised as a tax haven across Eastern Europe.
The country's allegedly lax company formation laws are being promoted by firms in Latvia, Russia, Ukraine and Belarus as authorities black list more traditional "fiscal paradises".
A new round of publicity for Scotland as an "offshore zone" began this month, more than six months after it was alleged that $1 billion had been funnelled out of poverty-stricken Moldova through Scottish shell companies.
One piece on the website of Belarus television station Varyag said: "A company operating in the UK does not need to register with the tax authorities and is therefore automatically freed from any tax payments on an absolutely legal basis.
"Having registered a company in Scotland, by using offshore rules, you do not need to carry out any audits and, furthermore, there is no requirement to provide financial reports."
The TV station stressed the kudos of Scotland being in Britain. "As a result of Scotland being part of the United Kingdom it does not fall in to the black list of offshore zones."
The Herald has found numerous recent adverts for company formation in Scotland, specifically of limited partnerships.
The number of limited partnerships in Scotland has more than doubled from just over 6,000 to nearly 15,000 since 2009.
The country now has more of these firms than England and Wales put together.
Scottish Labour raised questions about this last summer after an international investigation into the alleged fraud of three Moldovan banks uncovered that some of the companies used were in Scotland.
Labour's Jackie Baillie said: "It is extraordinary that Scotland is being described as an offshore tax zone. Somebody should be looking long and hard at how to close this loophole."
Andy Wightman, land reform spokesman for the Scottish Greens, said: "The Scottish Government should be saying loud and clear that reporting and transparency rules should be overhauled since it appears that Scotland is generating a shameful reputation as a place to launder money."
The Scottish Government has previously said that company formation rules are reserved to Westminster.
A spokesman said that this was also the case with corporation tax. But added: "We are determined to act decisively on tax avoidance where we have powers to do so.
"We have legislated for a general anti-avoidance rule for the devolved taxes, which is significantly wider than the UK’s anti-abuse rule that enables Revenue Scotland to take robust action to counteract tax avoidance."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules hereLast Updated:
Report this comment Cancel