I’m in Brussels talking about automatic information exchange today (and country-by-country reporting tomorrow).
It’s interesting to hear someone (I don’t think I can or should name him) close to the OECD Global Forum review group on information exchange saying that they are well aware that places like Monaco are taking the Mickey when seeking to appear internationally compliant with OECD standards by signing almost all their Tax Information Exchange Agreements with other tax havens.
And they say these places will fail the review process.
I hope they’re top of the pile for that reason.
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Don’t forget the ubiquitous Faeroe Islands 😯
I understand from a fairly reliable European government source that the OECD is trying to impose a rule that tax havens should conclude at least 60 TIEAs?
On the other hand, one of the main drivers of the whole tax haven-bashing, France, is yet to ratify any of the TIEAs it has signed up to in the last six months.
These agreements are bilateral and can come from either direction. If the Caymans does not think they need an agreement with Germany, they do not have to present an agreement. This leaves Germany no right to complain as they have an equal right to request an agreement from them as well.
It gets worse as the news from the last Global Forum was that OECD countries were being approached by Tax Havens with draft agreements which they were refusing, basically in order to make it more difficult to get on the white list. (The news of this actually brought an outburst from the OECD Chair admonishing any OECD country that would refuse an offer to make an agreement)
So naturally the tax havens went to whoever would complete one.
The OECD is partly to blame for this as well, given that they have helped set up blocks of countries to negotiate multilateral agreements within regions like Scandinavia. (Where Denmark, Greenland and Faraoe Islands, all part of Denmark, count as three agreements.)
I think it is fairly obvious that offshore financial centres are signing TIEA’s with other countries just to get on the OECD white list. Whether any information will ever be exchanged is another matter.
Oddly enough Cayman passed a uni-lateral tax information agreement early last year he OECD is still looking at, but affectively allowing all countries to (be able to) request tax information.
Although as with all TIEA’s they have to be within certain parameters with evidence.
Mike if a request is given with in the parameters of the agreement then information will have to be exchanged otherwise they will bw in breach of the agreement.
The OECD tried to kill off the unilateral declaration during the last Global Forum.
To the surprise of many of the attendees, including myself, the item was brought up for discussion. The agenda stated that the discussion was for approving a unilateral declaration process, however, when the item did come up, it was brought up with some anonymous proposal (from the OECD itself) to reject unilateral declarations to share tax information. The item was eventually tabled (to the next forum, maybe) as a number of countries took issue with the way the item was being handled, and that no advance notice was given of the revised suggestion.
Thanks Fred
Do you know why the OCED didn’t like the uni-lateral process?
Was it to conditional and restrictive to be effective?
I was told by one of the backers of the process that the feedback they have received was that ‘It is too easy’ a process to get off the gray list.
If you read through the OECD draft document ‘UNILATERAL MECHANISMS TO IMPLEMENT THE STANDARD’ the is a concern that a country that makes a unilateral declaration can limit the countries it is willing to share information with. Also, that it lacks a binding formal agreement between two countries. However, the issues that were identified could be resolved by adopting a standard process.
St. Kitts was a second jurisdiction that has made a universal declaration. their response during the session was very energetic to say the least. (And probably saved the process from an outright rejection.)
@Creg
Creg
Some countries can’t exchange without having a bilateral agreement in place and so were critical of Cayman’s approach on a technical basis(Germany I thinks was a significant one).
Most other countries, including Jersey, felt that Cayman was just taking the michael – especially after all the incredibly hard work that we and the IOM had put in on the agreements front. The actions of Monaco, San Marino et al even with agreements, are greeted with similar universal derision.
The Girrl
@Jersey Girrl
Girrl
I think you’re right on all counts
Note that as a possible first
Richard