GUERNSEY is among the top six international finance centres improving its transparency and exchange of information in tax matters, according to the OECD.
Along with Aruba, Bermuda, Isle of Man, Jersey and the Netherlands Antilles, the island has made substantial progress with the Organisation for Economic Co-operation and Development.
Angel Gurria, OECD secretary-general, speaking at the recent conference on the fight against international tax evasion and avoidance, said there had been a number of significant breakthroughs since 2000 when the organisation launched its project to increase the exchange of information on tax matters.
‘A total of 27 tax information exchange agreements has been signed since 2000 and around 40 more are under negotiation.
‘Most of the progress has been with just six offshore financial centres that are actively negotiating agreements.’
Guernsey is one of those six, and this praise should be enthusiastically welcomed, according to Jonathan Hooley (pictured), external affairs adviser to the States of Guernsey, who has responsibility for arranging tax agreements for the island.
Guernsey signed its most recent one with seven of the Nordic countries at the end of October.
Mr Hooley said the signing of them should not be feared as the impact they have on the island is only very slight compared to what had been happening before.
‘Guernsey has already for many years been providing information when requested to in terms of a criminal nature.
‘And it’s a relatively small step from a request of a criminal nature to one of a TIEA.’
He added that the number of requests the island received was very small and information could only be given out under a very specific request. For example, they could not be used as a ‘fishing expedition’ as some people might think.
Mr Hooley said working closely with the OECD was crucial to Guernsey maintaining its well-regarded reputation.
‘We need to move away from seeing this as a threat and move towards the situation where we are treated fairly in the process.
‘And by engaging with the OECD we are more likely to achieve that.’
He said jurisdictions that did not would find themselves in serious trouble as the OECD was moving forward with plans via one of its subgroup to ensure a level playing field was established between countries, and jurisdictions which did not comply could eventually face a number of defensive measures which would have been impact on their ability to do business.
‘By the time you are on a black list, it’s too late because the stigma that gets attached of ever being on there sticks.
‘If you are sitting in the UK thinking about where to set up your captive, you are not going to choose someone who is on a blacklist. It would be far more difficult and far too much hassle compared to choosing one that’s not.’
But despite its strongly held views on tax matters, Mr Hooley said no one should be viewing the OECD as anti-Guernsey.
‘It’s no longer OECD and non-OECD anymore. It’s more global and is more concerned about whether you are compliant or not.
‘The subgroup is made up of half non-OECD as well OECD and its aim is to establish a level playing field.
‘The OECD wants to be helpful with our process.
They understand why such a field is required and are consistent in moving towards that.’
Article posted on 14th November, 2008 - 2.30pm
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2 Article Comments
All very well to sign TIEAs but there’ll be no point if the States of Guernsey continues to stubbornly refuse to bail out Cheshire / LGL savers.
Guernsey won’t have an international finance centre to speak of.
Even the Icelandic Government has now pledged to top up EEA compensation to Icesavers, covering the shortfall of Landsbanki assets.
The UK will pick up the tab for the remainder and the Isle of Man has pledged £150m to help KSF savers.
What about the States of Guernsey? How much longer can they hold out this isolationist stand?
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We can all cooperate until we are blue in the face. The facts will always remain the same. If we wish to make money whilst others are losing theirs then they have every right to question this practice. We have had things our own way for far too long. This is a fact. The reality that we need to start believing is others can’t and won’t lose money to a place that is greedy and wishes to cash in at the expense of others. We are fooling ourselves if we think that we can fight this losing battle. We operate as a middle man when others are desperate to cut this out. I am quite bored by a lot of this. We are cooperating? So what! In essence we are making a rod for our own backs. The time is about to come and it is not too far from now when we will be told enough is enough. What then start an argument that we have no prospect of winning? We all need to appreciate that the good times are over. At least at this time anyway. Everybody is feeling the pinch! We cannot expect to pinch from others and smile about it. I will gladly see the back of finance and uncompetitive tax structures. We are allowing others to literally drive us out of businesses and lives so that they can remain competitive at our expense. Not any more. Compete? If not goodbye cos you won’t get any sympathy or handouts from me or many other locals. The states are a law onto themselves and if they feel that they are doing a good job then my sympathy rests with how the future is going to shape up? Recession is a great thing in my opinion. So I won’t be treating myself to a new car this year. I am not complaining one bit. What I am looking forward to is less traffic, cheaper living and generally a better quality of life. I am not talking about the things that money buys. The best things in life are free. This is something that a lot of people have forgotten. I welcome it back!
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