From the Jersey Evening Post:
Jersey has plans to move to automatic exchange of tax information by 2011.
Treasury Minister Philip Ozouf has revealed that Jersey is already committed to the introduction of automatic information exchange mechanisms by January 2011.
Excellent.
Pity it’s taken so long and that so much effort had to be expended, but we’ve won.
Now it’s on to extending the directive and to shattering corporate and trust secrecy in these places.
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Why not quote the truth in full, Richard?:
“Jersey supported the automatic exchange of information approach to the implementation of the EU Savings Directive (EUSD) when it was initially proposed. We introduced the option to pay a withholding tax when it was decided to allow the EU Member States of Belgium, Luxembourg and Austria a transition period during which to impose a withholding tax, when the Directive was introduced on 1st July 2005.
“Jersey remains ready to introduce automatic exchange of information as soon as the EU brings the transitional period to an end, and Austria, Belgium and Luxembourg move to automatic information exchange.””
So you haven’t won any battle: the truth is that by concentrating on Jersey, you were attacking someone who was on your side. Austria, Belgium and Lux were your true enemies.
Paul
Because the rest of the story is what is politely called bulls**t.
Jersey could have always opted for full information exchange, as Cayman, for example, did. It deliberately did not do so.
Please do not treat as gullible. It just shows you to be stupid.
Richard
I’m cynical about Jersey’s stance too, but for different reasons.
They have well advanced plans to introduce automatic information exchange — and they’re going to do it a full six months ahead of us here in the Isle of Man — but they didn’t think to mention it to anybody until after we’d made our groundbreaking announcement?
Hmm.
Guernsey is now clearly about to follow suit and all three Crown Dependencies can now move forward into a new era with the respect, if not the wholehearted support, of outside agencies. There will undoubtedly be some economic pain, particularly on top of the global recession, but nowhere near the extent of the pain which Richard believes. The islands now have an opportunity to reshape their industries, focusing on becoming even stronger centres of excellence for specialist fund administration and tax-compliant fiduciary and estate planning work, and also taking the oppportunity to diversify into other economies which are appropriate for the skills and resources of the islands’ populations. The future is very bright once everybody embraces the change.
Rupert
At the very least the UK will collect significant amounts of higher rate tax that it should enjoy already
But we all know that’s the tip of the iceberg and once trusts and companies are brought into the scheme (and I am sure you are time delaying the switch-over to give maximum marketing opportunity for these as evasion opportunities) then we will see the real benefit, at which point your financial services sector will receive another significant blow.
And given the trajectory of travel this is only a matter of time, and almost certainly less time that you think.
Richard
Richard
I note your sceptism but I simply don’t agree. I cannot speak for the banking sector but from my own reliable straw poll of fiduciary executives they have not been taking on business for several years which relied on confidentiality for tax purposes. They certainly aren’t planning to exploit the next 2 years as you suggest as that’s no way to plan a business. It will be business as usual for them, putting in place tax-compliant estate planning and family office structures for clients from all over the world.
But I am not naive. Some smaller dinosaur players in the Crown Dependencies are bound to be pushing the boundaries in what is a very dangerous manner for them and they are undoubtedly finished (and their futures could be far worse than merely being finished as businessmen). I do believe that the offshore private banking sector will be by far the biggest loser, and that’s where the most jobs will be lost. There will be some pain unquestionably, but the islands will cope as they have always done.
Its a new era going forward, but I for one, despite being totally committed to the fiduciary sector, welcome the diversification of the economy which will result in say 5 years time. Until then, the islands’ governments will need to be adaptable and welcoming to new business opportunities from other sectors, and no doubt GST will rise in Jersey and be introduced in Guernsey to tide us over. Not sure what the Isle of Man will do on that front, but I suspect they will simply raise the local rate of income tax back up to the 20% level of a few years ago.
I know Rupert will think me cynical, but I have to ask…
It’s one thing to sign up to something like automatice exchange of information. Another to actually supply the information. Will there suddenly be a flow of information to HMRC?
James
Of course. Unlike some jurisdictions, the service providers in the Crown Dependencies do at least actually hold the information that they are meant to be able to exchange !
James,
Iago’s famous soliloquay in Othello was once memorably described as “the motive hunting of motiveless malignity”. In other words, Iago hated Othello and was just trying to find a reason to explain his hatred, which was, fundamentally, unjustified.
That is what you and Richard do. You hate Jersey. So you ask Jersey to do things. And when Jersey does do them you start saying that it isn’t enough, or that although Jersey says it is doing something, in fact it isn’t.
So no matter what laws it passes, what information it provides, how many times it is assessed by independent bodies or countries and found to be exemplary, you refuse to believe it.
There is no issue with automatic exchange, because there is no dodgy money in Jersey.
It is time you woke up to reality. The reality is that you hate Jersey, Guernsey and the Isle of Man, not because of what they do, but because that is the type of person you are.
So you are already making the argument that if there is automatic exchange then if there isn’t a huge amount of information exchanged it must be because Jersey is not fulfilling its obligations. Because the alternative – that Jersey has nothing to hide, that Othello is a good man – simply cannot be accommodated in your narrow world view.
Paul
I do not hate Jersey. I rather like it, and I have good friends there.
I hate what the financial services industry has done and does do there. But the same applies equally to a lot of what happens in London.
I can’t help you with your paranoia. But I can say without a shadow of doubt that your claim that “there is no dodgy money in Jersey” is plain straight forwardly wrong, and your case would be improved no end if you recognised it and addressed it.
Denial is not pretty.
And of course you can accuse me of a narrow world view – but it just so happens it now appears to be the prevailing one
Richard
Richard,
One point that is constantly overlooked, is that Jersey is expendable to most multinational fianncial organisations. Which is why the only palce you might find “dodgy money” in Jersey is in one of the ever diminishing number of independent trust companies or in the Jersey office of a global organisation that is itself rotten to the core.
The vast majority of business in Jersey is conducted by businesses that would be closed down tomorrow if they embarrassed their head office. And so that business goes elsewhere: it no longer even goes near Jersey’s radar.
I think the key issue is that, as a small Island, Jersey has to operate in the context of a wider world. Cheap fuel killed both tourism and agriculture and finance expanded to fill the vacuum. But small island states can only follow the global agenda, they cannot set it.
Which is why I encourage your new blog – I think (and I have posted more than once on this) – that we need a new form of living based on sustainability rather than growth. And indeed, the pursuit of growth may well be the reason why, despite the technological advances of the last century, most of us are working harder than ever in environments that are more sterile than ever.
Paul
I’m sorry, but I don’t hate Jersey. I was asking a question, because I was interested to know the answer. It was not a daft question.