Jeremy Hunt oversaw signing of San Marino low-tax treaty backed by Tory donor | Jeremy Hunt

Jeremy Hunt oversaw the signing of a low-tax treaty with San Marino championed by a number one Tory donor, who along with his firms has given greater than £700,000 to the occasion and £30,000 to the chancellor.

Maurizio Bragagni, a distinguished businessman and diplomat for San Marino, was current in No 11 Downing Street when a “double taxation” treaty between the UK and San Marino was signed in May.

After the occasion, Hunt posed for pictures exterior No 11 with Bragagni and San Marino’s international secretary.

Whitehall sources stated San Marino had for not less than two years been lobbying the federal government by the Foreign Office to barter and signal such a treaty however that the Treasury and HM Revenue and Customs make the choice on which international locations to prioritise.

A Treasury spokesperson stated Hunt had no involvement within the negotiation of the treaty, which was completed by HMRC officers, and that the unique request for a deal was made by the Foreign Office in 2022 – six months earlier than he grew to become chancellor.

They stated the method within the Treasury was led by Victoria Atkins, the monetary secretary to the Treasury, who signed the doc with Bragagni inside No 11.

When the tax treaty was signed, the consulate praised the work of the all-party parliamentary group (APPG) on San Marino, comprising MPs and friends, for its “continuous lobbying support” in relation to the UK authorities on the difficulty.

Hunt is a former member of the APPG on San Marino and visited the small landlocked state, surrounded by Italy, in 2021, declaring hospitality from San Marino for 4 members of his household and himself, flights, lodging and meals with a complete worth of £7,869 over three days.

Jeremy Hunt
A Treasury spokesperson stated Jeremy Hunt had no involvement within the negotiation of the treaty. Photograph: Tayfun Salcı/Zuma Press Wire/Shutterstock

Bragagni was current on the 2021 go to, throughout which Hunt was awarded an honour by San Marino often known as the order of the Knights of St Agatha.

At the time, San Marino stated it had recognised “Grand Officer” Jeremy Hunt for his “merits in promoting San Marino’s best interests in the UK, for his valuable support during the emergency situation created in the republic during the pandemic”.

Bragagni introduced the treaty on his web site, saying it had come about as a result of of the “determined work of the consulate of San Marino in London” over a interval of 4 years.

The Treasury’s explanatory notice says it’s designed to “eliminate the double taxation of income and gains arising in one country and paid to residents of the other country”. It additionally stated there have been “specific measures which combat discriminatory tax treatment and provide for assistance in international tax enforcement”, though the UK already had an settlement on provision of data to tax authorities with San Marino, signed in 2011.

One tax and accountancy skilled, Richard Murphy, stated he believed it might result in the stream of potential taxation from the UK to San Marino, whereas one other tax skilled stated they might not see what tax advantages it will carry and thought it appeared principally to be a chunk of diplomatic theatre, presumably designed to point out that San Marino was a world participant.

Murphy stated: “There can be no monetary flows from San Marino to the UK of any consequence. Why are we permitting for the potential of flows from us to them? I believe there could possibly be the chance for somebody to take advantage of this by ‘treaty shopping’, to arrange the chance to create a monetary providers hub in San Marino that could possibly be used for funds to stream out of the UK.

“For me, any such attainable alternative is naive at finest and completely pointless, why do it? You must query the political judgment of any politician who would wish to do this, not to mention declare publicity for it.”

Asked whether or not the deal could possibly be perceived to be a possible battle of curiosity for Hunt, a Treasury spokesperson stated: “We reject these claims as negotiations on this settlement have been carried out by HMRC officers and started in April 2022 – lengthy earlier than Jeremy Hunt grew to become chancellor – following a request from the Foreign Office.

“The UK, below successive administrations, has signed over 130 double tax treaties, together with with the United States, China, Japan, India, Germany and smaller international locations. They are designed to forestall tax evasion within the UK and extreme international taxation and different varieties of discrimination in opposition to UK enterprise pursuits overseas.”

The UK has double taxation treaties with many states – together with very small ones – however their operation will be controversial if it seems that one nation is benefiting greater than one other.

Bragagni and the San Marino consulate didn’t reply to requests for remark. The Conservative donor has beforehand been criticised by Labour for feedback made in Italian final yr about “foreign Muslims” operating city areas and Labour having an “anti-Judeo-Christian identity, which allows Islamic groups to feel at home”, claiming the occasion’s success in London was partly as a result of “Muslims vote Labour”.

At the time, Bragagni stated: “I have never knowingly offended anyone. I apologise that my article originally written in Italian caused unnecessary controversy when translated.”

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