Guernsey Reiterates Cooperation In Tax Matters

Friday, May 17, 2013

Ahead of the forthcoming G8 and G20 meetings on tax transparency, Guernsey's Chief Minister, Peter Harwood has taken the opportunity to recall Guernsey's leadership and track record on adopting best practices and cooperating in international efforts to tackle fiscal crime.

In a statement ahead of the event, Harwood sought to highlight that:

• Guernsey was on the original Organization for Economic Cooperation and Development's (OECD) "white list;" and has been recognized by the OECD's Global Forum as having the necessary legal and regulatory powers in place to ensure that local authorities can effectively exchange tax information on request.
• Guernsey has over 40 tax information exchange agreements in place, as well as a network of double tax agreements including provisions to exchange tax data.
• Guernsey was awarded the highest compliance rating by the UK Government and the UK tax authority, HM Revenue and Customs in terms of compliance in information exchange since its ratings were introduced in 2011.
• Guernsey chose to automatically exchange information under measures equivalent to the EU Savings Tax Directive, a practice still not met by some EU Member States.
• Guernsey meets the standards of "good global governance" in tax issues as recommended by the European Commission in December 2012, and voluntarily adopted and complies with the EU's Code of Conduct on Business Taxation.
• The territory meets key FATF recommendations on anti-money laundering, and outlaws such activity.
• Guernsey collaborates with developing countries and multilateral institutions on asset recovery, to ensure the island cannot be used as a back door for parking or transferring illegitimately-acquired assets.
• The island's Financial Services Commission has regulated trusts and corporate service providers for over a decade while many OECD members do not yet regulate trusts and corporate service providers; and lastly,
• There are no banking secrecy laws in Guernsey.

Emphasizing the territory's support for global efforts, Harwood stated: "Guernsey firmly believes that common global standards are the most effective method of fighting fraud and tax evasion, and strongly supports the rapid adoption of FATCA-type multilateral automatic information exchange as a new global standard. Guernsey has welcomed the recent announcement by the UK, along with France, Germany, Italy and Spain, to pilot automatic information exchange based on the Foreign Account Tax Compliance Act (FATCA) agreements with the USA, and we support those countries' efforts to ensure that the Organization for Economic Cooperation and Development adopts multilateral automatic information exchange as a new global standard."

"Earlier this year I was able to announce Guernsey's intention to finalize a draft agreement on a proposed "tax package" with the UK. That package included an agreement in principle to enhanced reporting of tax information along FATCA principles. Our agreements with the UK and the US will be subject to the proper decision-making process of our Parliamentary Assembly and will be presented to them for approval later this year. As I made clear in my open letter to Prime Minister Cameron of May 1, 2013, at that juncture I would be willing to present a report and a recommendation on joining the G5 Pilot."

"Guernsey is fully supportive of the UK's G8 agenda. We remain committed to meeting all international standards on beneficial ownership, as demonstrated by our implementation of the Financial Action Task Force's recommendations. The actions we have taken in Guernsey emphasize that we fully support international co-operation on the transparency of and access to beneficial ownership information."

He concluded: "We support the calls for greater tax transparency - not just with our words but with our actions. We are part of the tax transparency process, and look forward to continuing to play our part. The message from Guernsey is clear - Guernsey is not a jurisdiction of choice for those who want to hide."