City AM reports:
“Cayman isn’t a tax haven,” Travers insists. “It has had full transparency with respect to tax matters for over a decade, most importantly, with the US since 2001 and with all 27 countries under the European Union since 2003.” The Organisation for Economic Co-operation and Development (OECD) has produced a three-tier list, featuring a “white list” for those offshore locations that have ‘substantially implemented’ information-sharing agreements. Cayman recently made it on to the white list, alongside Jersey and Guernsey.
What absolute nonsense. Information exchange on personal bank accounts with EU residents and 80 pieces of data a year to the US is not full transparency. The man is dissembling for Cayman.
I wasn’t in the same report:
Richard Murphy is an accountant with the Tax Justice Network and an outspoken critic of the offshore business community. “Cayman is just the first coming to terms with the fact that it is basically bust. I think others will follow,” he says. “The situation where you aren’t prepared to raise revenue to meet your ongoing revenue obligations isn’t a viable option,” he says.
Murphy argues that the increasingly multi-jurisdictional offshore law firms — the so-called “offshore magic circle” — has helped create a sympathetic regulatory regime for their clients. “There’s been a contagion of ideas designed to undermine the regulation of mainstream states. Tax isn’t the primary product, secrecy is. The intention is to create legal structures hidden by secrecy which allows the user to avoid obligations in the place where they really undertake transactions.”
That’s the reality. Tony Travers needs to answer the charge, not spread misinformation.
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80 pieces of data a year to the US is not full transparency
How many times has this been covered? Cayamna does not have control over how many requests the US decides to do.
All the countries with TIA have agreed to their times, if they didn’t work why did they sign and negociate them?
@Creg
Yes Creg. 😀
We all believe that it is totally unjust to call Caymans a tax haven. Never mind that 90% of the world’s hedge funds are set up there because they have the “unique admin skills”.
We’ll also just ignore that the Caymans at a stroke of a pen amended their legislation in mid-2005 so that immediately 6,700 Cayman funds were re-categorised from “UCITS equivalent” to “non-UCITS equivalent” just to avoid the EU savings tax. Fortunately, because of that, the EU Commission will now include all funds no matter their composition or legal status within scope of the amended EU savings tax.
If I were setting up a new fund today, I certainly wouldn’t be looking at a bankrupt outmoded base. Hope the fishing is good there, you gonna need that skill.
Mark
Oh so true
Richard
Its interesting that offshore jurisdictions are being frequently criticised by you for merely delivering what has been asked of them. It is an unavoidable fact that the concept and content of TIEAs was set by parties other than the offshore jurisdictions themselves. The fact that this would result in information being provided only upon request would have been obvious, so criticising a jurisdiction for only delivering a low number of information exchanges is hardly the fault of the offshore jurisdiction.
By all means criticise the TIEA system itself for being faulty, and indeed you do just that, which is fair enough. But is it equally fair for you to criticise the offshore jurisdictions for doing exactly what the onshore jurisdictions asked them to do in the first place ?
Likewise, the EU itself agreed that several jurisdictions could have an option to withhold tax on interest instead of automatic exchange of information. Again, that decision can and is being criticised, but the jurisdictions concerned were only able to do so because the EU expressly offered them that option. If that offer had not been made, then the withholding option would not have been available and so jurisdictions would have had to comply with automatic exchange. Should the jurisdictions be criticised for accepting something which the EU deemed perfectly acceptable to them at the time of negotiation ?
Yes, things have moved on and the option to withhold tax should clearly be abolished. But it hasn’t been yet, and that’s because the EU agreed that it could remain until some years later. Who made that decision ? The EU of course, not the offshore jurisdictions.
You are right to attack and criticise the TIEA system, but I don’t think you are blaming the right parties for the consequences of it. The EU has got precisely what it demanded from and accepted from the offshore jurisdictions in the first place under the EUSTD, and the OECD countries have got precisely what they demanded in relation to TIEAs. Nothing more, nothing less. If they had wanted more then they should have pushed for more. But they didn’t. Is that really Cayman’s/Jersey’s/Guernsey’s/Isle of Man’s fault ? Of course not.
It does not make the status quo re. the EUSTD and TIEAs correct, but is your blame for the status quo being fairly attributed ? I don’t think so.
Cayman was allowed to be part of the design process for these
They do share blame for them not working
Don’t present false excuses
Rupert
What’s the point of Lyndon Trott and a ‘representative’ in Brussels if it’s all such a fait accompli?
I think it would be fair to say that some turkeys are very, very large and toothy so the timing of annual winter festivals is open to some debate. And the realities of the menu ideas can be diversely interpreted. A bit like accountancy.
Mark:(so many lies, you could be a Guardian reporter))
I don’t think I said Cayman was not a tax haven, please show me where I did?
Outdated model? really this is Cayman’s first deficit year in a long time, and it will not last long. Cayman’s standard of living is the highest in the Caribbean, outdated really?
Cayman is not bankcrupt, as they have yet to not meet their obligations. The Guardians piece on Civil Servants finding pension contributions missing from their pay checks is a lie (helpful tip :you shouldn’t really beleive everything you read in the Guardian)
In fact all Cayman was requesting from the FCO was to be allowed the same debt:GDP ratio as the UK
Richard
Hardly a false excuse. It takes two or more parties to negotiate an agreement and an agreement requires the parties to agree on the content. The OECD and EU knew what they were demanding and knew what they signed up to. They got it wrong. Are they not to blame ?
Strangely, I’m with Rupert here! Tax havens only exist because of the connivance of the governments of the major industrialised countries. When the EU is negotiating with some small island in the West Indies, the EU should really be in a strong enough position to get what it wants.
Arnald
Sorry – I must be being thick. I simply don’t understand your 22.21 posting. You’ll need to explain it.
That is a bizarre position to take. The TIEA’s are set up for the benefit of the OECD/EU countries not the offshore countries (I assume that very little information is ever requested by the offshore jurisdictions under the agreements). The offshore countries can hardly be blamed if the other parties to the agreements later decide that they are unsatisfactory.
@Alex
I agree completley Alex.