Beneficial ownership: the beating heart of recent tax revelations

Beneficial ownership has enjoyed another high-profile position in the news agenda this week, as journalists, bloggers and social media pundits across the political spectrum pick apart recent revelations surrounding corporate tax and other compliance issues.

Tax is a very human issue, whether it relates directly to one's income or to the profits of any companies people have shares in. So beneficial ownership really is the beating heart of the "Panama Papers".

But this is where things get confusing from a number of perspectives, including:

• How beneficial ownership is defined and what it actually means;
• How you can get hold of the information; and
• Interpreting the often tangled ownership structures of corporate families.

If you can't identify and understand an entity's beneficial owners, you can't fully appreciate its credentials.

But it's not easy.

According to Louise Green, our global director of marketing:

"Countries vary in the amount of financial data they require companies to disclose, and disclosure of ownership is even less mandatory. Which countries are considered to have strong or weak frameworks in place might also surprise you if you read Transparency International's G20 assessment.

"Regions and regulators also differ on what thresholds of ownership define beneficial ownership, and that's before you even consider the complications of circular ownership (the not uncommon practice of companies owning or part-owning themselves).

"And some companies will also deliberately obscure their true ownership or control within complex corporate families that are very difficult to pick apart without the right sources of information and analytical platforms."

We compile our corporate ownership data from hundreds of sources, cross-referencing information against M&A deals and filed accounts.

What really helps interpret these complex structures are our data visualisation tools, which illustrate paths and percentages of ownership and control.

We also offer a specific tool to help the researcher hone in on beneficial ownership, according to their chosen definition.

We're finding an increasing appetite for information on beneficial ownership, and more and more this is around reputation protection, particularly when dealing with third parties, as well as the more understood area of regulatory compliance.

We're working with numerous information providers around the world to meet these needs.

Some unknowns take longer to resolve than others. But, as governments crack down on tax avoidance and the climate of compliance heats up, the gaps are slowly closing.