New barriers planned for OECD tax white list

www.businessifc.com interviews the OECD’s Jeffrey Owens
By: www.businessifc.com
 
Aug. 10, 2009 - PRLog -- The OECD first published a dynamic table denoting tax transparency by international financial centres on April 2 at the conclusion of the G20 summit in London.  The Paris-based body has since updated the table several times: first to remove the four jurisdictions classified as uncommitted and non-compliant and known as the black list.
 
Other revisions have come as the OECD recognised the achievement of centres in reaching in the quantitative benchmark of 12 agreements signed with major economies for the open and transparent bilateral exchange of tax information.  
 
This has taken the form of new tax information exchange agreements (TIEAs) based on the OECD model or amendments to existing double tax treaties to facilitate tax transparency. Jeffrey Owens, director of the OECD’s Centre for Tax Policy and Administration, said: “The figure of 12 was selected in October of last year. At that time the vast majority of offshore financial centres had zero TIEAs in place. We wanted a target which was ambitious but achievable. But this is not a number game. The quality of the agreements must meet the standard and we will want to ensure that they are observed in practice.”  
 
He added: “12 TIEAs or the equivalent is not the ceiling. We are hearing from certain jurisdictions (for example, the Caymans) that they want to build a network of tax transparency agreements and this is the type of commitment which we wish to see.”  
 
The table composed two other sections: the committed and compliant (commonly referred to as the white list) and the committed but not compliant (grey list). The grey list is sub-divided into tax havens and other financial centres.  
 
The principal driving force in the commercial arena for international financial centres since April 2 has been the status of jurisdictions – white list or grey list. White lis centres have made huge capital out of their committed and compliant status. BusinessIFC.com has reported throughout the summer on the efforts to achieve white list status.  
 
Jersey is a key example. It launched its foundations product in mid-July 2009 pointing out to potential clients that Jersey is committed and compliant while the two largest vendors – Panama and Liechtenstein – may be committed but they are firmly non-compliant.  
 
Ireland – white-listed since April 2 – has persuaded a range of companies to forsake Bermuda as the location for group holding companies and instead migrate to Dublin or nearby. This may slow after Bermuda’s elevation to the top tier.
 
Since April, Bermuda has been joined on the committed and compliant list by Bahrain, Luxembourg and Belgium. Two jurisdictions – the British Virgin Islands and the Cayman Islands – have signed 11 tax information exchange agreements. Cayman says it has initialed its agreement with New Zealand and hopes for signature by August 13.  
 
Some question has been raised that Cayman might not be elevated to the top tier on signature of 12 TIEAs but Owens dismisses this. "If the government of the Cayman Islands can demonstrate that it has signed 12 high quality agreements then it will be admitted to the committed and compliant. The government of the Cayman Islands has said that it wants a network of 30 such agreements. That would be very encouraging.”  
 
He says there is progress among other jurisdictions on the grey list. “Samoa, for example, says it is in negotiation with six or seven major economies. But others, Panama comes to mind, have failed to implement a single agreement. The G20 identified a set of fiscal sanctions. Independently, the UK, Germany and France and others have said that they will introduce defensive measures. Financial centres need to be aware that governments will not tolerate offshore non-compliance."  
 
At a keynote meeting in Los Cabos, Mexico starting on September 1, the definition and scope of peer review will be decided. “The Financial Action Task Force (FATF) conducts between six and eight of these every year. We would expect to do somewhat more of them. A small team of officials and representatives from member states would visit jurisdictions and make reports on their compliance with the agreements.”  
 
The French president Sarkozy and the UK premier Brown have said that that they would like to see the March 2010 G20 as the decision point on sanctions. Throughout the autumn of this year and the early part of 2010, the rapid pace of negotiating and signing protocols to existing double tax treaties and new TIEAs should accelerate.

Owens says that the process will become tougher. The benchmark will be lifted. Larger networks of tax treaties will be driven by an international climate of zero tolerance on tax evasion. Peer review will determine the quality of compliance but Owens said for those countries which do not make any effort defensive measures will bite.
 
Read the full article at: http://www.businessifc.com/articles/Owensjuly09.htm

# # #

BusinessIFC.com is an independently owned and managed web site which is aimed at professionals and investors operating in and through international financial centres.

It covers commercial, regulatory, legislative, product, service line, personnel and transactional themes. The key areas of coverage are:

•Wealth management
•Taxation – corporate and personal
•Private client issues
•Fund management and administration
•Private banking
•International insurance
•Trusts and foundations
•Corporate service
•Ship and aircraft registration
•Real estate
The site monitors developments in more than 50 international financial centres worldwide. Our jurisdictional reports feature: the regulation of banking, insurance, companies, funds, trusts, shipping and real estate. We also outline the opportunities for investment in each centre for personal and corporate investors.
End
Source:www.businessifc.com
Email:***@businessifc.com Email Verified
Zip:BR3 1JY
Tags:Oecd, Tax Transparency, Offshore Centres, White List, Fiscal Sanctions
Industry:Taxation
Location:Beckenham - Kent - England
Account Email Address Verified     Disclaimer     Report Abuse
Trending
Most Viewed
Daily News



Like PRLog?
9K2K1K
Click to Share