Scotland marketed as tax haven alongside Panama

Scotland is being marketed as a tax haven beside the likes of Panama, with Russian news websites hosting advertorials listing it alongside the phrase “offshore zones”, The Herald reports.

For some years already Scotland has been used by Eastern Europeans taking advantage of the Scottish Limited Partnership (SLP).

Andy Wightman, tax campaigner and Scottish Greens candidate, said: “These revelations should remind us that secrecy and lack of transparency in corporate and tax affairs know no geographical boundaries.

“While places like Panama and the Cayman are often singled out for attention, there are frequently aspects of our own affairs that have been neglected for too long and ScottishLimited Partnerships are a very obvious example.”

One company, Open Offshore, offers a sale on SLPs for $1,290, which compares favourably with a Panamanian firm selling business vehicles for $1,550.

In October last year BBC Radio 4’s File on Four programme investigated a “mind-bogglingly” complex financial scam which saw Moldova robbed of $1 billion – with the trail leading to an ex-council flat in Edinburgh and fraudsters who availed themselves of the SLP.

In February this year Justice Secretary Michael Matheson said he was “very open” to a review of SLPs.

He said: “I am very open to looking at whether there is a need to improve the legislation and, if necessary, to make representations to UK ministers.

“We need to make sure that the legislation that is in place is operating as effectively as possible.”

A typical scheme sees an SLP established with two “members” which are companies incorporated in Panama and the British Virgin Islands, where there is a zero per cent corporation tax.

The company can then open accounts elsewhere but does not need to register for UK tax or disclose financial accounts in Scotland.