The Guernsey Press is reporting the usual gibberish from local spokespeople:
Guernsey is ready to confront those who label it a tax haven, according to the Guernsey International Business Association.
Vice-chairman Paul Meader said he was tired of seeing the island being mentioned alongside harmful jurisdictions after UK politicians and the Tax Justice Network suggested it could be included on a new blacklist before the G20 economic summit.
‘If the UK wants to investigate offshore centres, then we say bring it on.
‘We see it as a great opportunity to differentiate between those that are not playing by the rules and international standards and those, like us, that are,’ he said.
Mr Meader demanded respect for the island’s system, which he said met international standards that many larger centres did not.
‘We are tired of getting lumped in with everyone else when we are demonstrably in the first tier of financial centres,’ he said.
I can we presume that some people are taken in by these acts of bravado. They are fools if they are.
As a matter of fact, I am absolutely sure that Guernsey will be on any new list of tax havens to be issued by the G20, whether on 2 April or soon thereafter. It is quite impossible to imagine that that list, rumoured to have at least 40 states on at at present, could exclude a place like Guernsey. Mr Meader is therefore setting himself up for a bruising.
But he is also showing how enormously out of touch he is. It is absolutely irrelevant how compliant Guernsey has been with current international regulatory requirements. Those regulations have very clearly failed the world. They are going to be scrapped. Tests of substance, not of box ticking, will replace them. Guernsey faces a real risk of failing those tests of substance.
Guernsey is a secrecy jurisdiction. It does not comply with international expectations on placing data on public record. It has not shown serious commitment to information exchange. It applies the withholding tax option under the EU savings tax directive. These are consistent indications of its lack of willing to play a proper role in a well regulated world financial system.
Mr Meader should listen to what we are saying rather than abuse us. I think he is heading for a train crash, both at the G 20 and subsequently when the UK reviews its own secrecy jurisdictions. Does he really seriously think that Gordon Brown can imagine ‘ outlawing tax havens’ and that Guernsey will not be affected?
If he does he is in for a rude awakening.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Richard
What on earth is the so-called “international expectation for placing information on public record” ?
What is the official international standard and who is it who has this “expectation” ? I suspect that the “expectation” is your own.
Which countries of the world comply to the level of public disclosure expectation to which you refer ? The US? The UK? France ? Germany ?
This is important if you are to attack any jurisdiction for failing to meet a standard which seemingly doesn’t actually exist.
Rupert
My colleagues and I do a lot of travelling. We meet a lot of governments. We talk with a lot of politicians and civil servants.
No all agree with us.
Many do.
There is, without doubt and international expectation on this issue.
These is a universal awareness that you are a long way from it.
Richard
Maybe so Richard, but my point is that if those governments and regulators have neither announced their requirements nor enacted them into legislation then its a tad rich to criticise any jurisdiction for failing to comply with them !
Richard,
You say that Guernsey applies taxation under the EUSD. This is inaccurate. It is up to the individual institutions whether they apply tax or report.
I can only comment on the company for which I work. We passed the option on to our clients and have about 90% reporting. Those that did not respond were taxed.
Donkey
That’s in line with my own organisation. Only 2 out of 700-odd clients opted to have tax withheld and in both instances we reclaim the tax withheld on their UK tax returns against their overall tax liability.
I wonder where all these mythical tax evaders are ?
Rupert
So you are clean. Great
Sorry – but an awful lot of the rest aren’t…..
Facts prove it
Now stop posting irrelevant data and please address the issues
Like how are you going to get the rest to go clean?
Richard
Richard
T would be interested in your response to my posting number 3 above.
Re your posting number 5 I am totally convinced that the vast majority in Guernsey are also “clean”. What data do you possess to suggest otherwise ? How much effort should be spent trying to clean up those who are already clean ?
Once the revised EUSD includes companies, Trusts & Foundations, insurance policies, non-UCITS and structured notes… then we’ll see if only 1% are choosing withholding tax.
Mark
I can only speak for my own organisation and for us it wouldn’t make any difference as our clients are 100% tax compliant. We prepare and file all relevant self-assessment returns of the structures that we administer. Those are mostly UK-connected structures and of course existing anti-avoidance legislation already covers income and gains in many structures. Those who are using trusts or companies or foundations to hide behind those structures to evade tax of course deserve to be caught. They would already be breaking the law if not complying with their current tax reporting obligations.
It is also of course highly relevant that any who opts for withholding once the EUSTD is extended that decision in itself would be suspicious in my view and so should be reported.
The sooner that the option to withhold is eliminated universally under the EUSTD, the better.
Rupert
It is very difficult to take seriously any tax practitioner who claims that their entire client base is 100% tax compliant.
I would have loved to have thought that true of the firm of which I was once senior partner, and we worked very hard to make sure that was the case. But, we still had clients who either deliberately or in error fell short of the required standard.
I am sure you do too: I do not believe you if you say that is not true. It is just not credible to claim this, just as much of what you say is not credible.
Richard
Richard
Sorry to disappoint you. OK – I accept that if there was any error then in those circumstances the client may accidentally not be tax-compliant. But otherwise yes – 100%. I don’t care whether you believe it or not but its true and I know of many otherws who operate to the same standards. It doesn’t suit your agenda I know, but that’s life.
The last phrase of your last sentence I’m afraid does you no favours at all but I will put it down to your stress and disappointment at the lack of progress made with your agenda by G20.
Rupert
Pardon?
Not going my way?
Switzerland, Monaco, Lichtenstein, Andorra and others promise the end of banking secrecy. TIEAs being signed all over the place.
Indeed, not all I want – but get real – could you have imagined that this might have happened last November?
we are making progress – do not doubt it
Richard
Richard
I admit I certainly could not have imagined this happening last November. So far, I don’t think any reasonable person in the offshore industry (and yes there are some who fit that description !) would view any of those developments to be a bad thing.
But be honest – its far from what you wanted. You wanted to completely destroy the offshore world and particularly the Channel Islands and the Isle of Man. Your spin on things is to be admired – you are clearly learning some skills from all of your dealings with politicians – but even a cursory glance of this site clearly shows just what you wanted.
Listen – I have no doubt that things are moving in the right direction for you and, yes, for the offshore industry as a whole. Some jurisdictions will not survive and neither should they be allowed to. Others will be forced to clean up on the edges where they need to – and that’s also fine – while others will need to completely re-invent themselves. Some will probably succeed, while for others the changes required will be way beyond them.
In my view, offshore 2015 will be based around maybe 10 jurisdictions in my view, with “almost” total transparency (but with full exchange of information for tax purposes), with the “almost” relating to the ongoing availability of general commercial privacy from the prying public provided that such privacy does not extend to tax or regulatory issues. I believe that the surviving offshore centres are capable of becoming places that are acceptable to G20, but only on the grounds that they can access the tax information and control the regulatory risks to an acceptable level.
The era of undeclared offshore bank accounts will be well and truly over (good !) and all users of offshore structures will be aware that their structures have to stand up to full scrutiny (also good !).
If it means that trillions of dollars of offshore funds find their way back from unlawful situations today then that’s also good.
I don’t believe that you will ever actually reach you utopias of outlawing nil-tax offshore jurisdictions or global tax harmonisation, but on the other hand I have little doubt that by 2015 you and your colleagues will have played an instrumental role in making offshore a more sustainable place for the few who are prepared and able to play to the new rules.
I personally would call that a decent result, but would you ?
Richard, it would seem that the OECD and the G20 disagree with your claims and opinions.