A handful of EU states on Thursday (14 April) announced they would crack down on tax dodging by peeling back secrecy provisions in shell companies and overseas trusts.

The move follows the release of over 11 million documents from Panamanian law firm Mossack Fonseca that reveal how the global elite avoid paying into public coffers.

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Finance ministers from France, Germany, Italy, Spain and the United Kingdom, pledged an automatic exchange of information on offshore accounts starting in 2017 or 2018.

In a joint letter, they vowed to set up registers that require "beneficial owners of companies, trusts, foundations, shell companies and other relevant entities and arrangements" to be identified.

They say the information needs to be shared with both tax administration and law enforcement authorities.

Cameron opposed trust transparency

British prime minister David Cameron, for his part, had admitted to have made a profit from an offshore trust exposed by the Panama Papers.

Trusts are more commonly used in the UK than elsewhere in the EU. UK authorities have in the past been reluctant to disclose people behind them due to privacy issues.

The prime minister in 2013 opposed revealing the people behind trusts.

“It is clearly important we recognise the important differences between companies and trusts,” he said in a letter sent to Herman Van Rompuy, EU council chief at the time.

The European Parliament in 2014 included trusts in an anti-money laundering bill but saw resistance from British conservative MEP Timothy Kirkhope.

Kirkhope had tabled an amendment to disclose the beneficial owner behind trusts only when they are deemed to be a high risk in terms of money laundering.

KPMG - Hong Kong not a tax haven

Meanwhile, the latest efforts by the five finance ministers are also likely to meet resistance from big auditing firms like KPMG.

Jane McCormick, senior tax partner, head of EMA Tax of KPMG, told MEPs in the European Parliament last year that Hong Kong is not a tax haven.

“I wouldn’t think that my Chinese colleagues would actually accept that Hong Kong is a tax haven," she said.

Hong Kong, which is now a part of China, has a historic connection with the UK and KPMG's presence in the city is now a part of its mainland China practices, she said.

But around 29 percent of Mossack Fonseca's collection fees come from companies incorporated in Hong Kong, making the island city its most lucrative location.

McCormick had also praised tax haven Jersey for its transparency drive, noting that most people on the island are actually auditors.

The Mossack Fonseca files show how British oil firm Heritage Oil and Gas Ltd used Jersey to avoid paying $400 million in capital gains tax to the Ugandan government.