I mentioned the other day that Jersey, unlike the Isle of Man and Guernsey, is a category 2 state with regard to offshore tax penalties to be applied by H M Revenue & Customs this year.
The criteria for allocating places to categories are as follows. Jersey is paying the price of refusing to partake in automatic information exchange, a policy designed to assist tax evaders.
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Jersey is not paying any price, is it?
This must surely be one of the stupidest initiative by the government to fight offshore tax evasion; All it does is provide free advertising for the places where tax evaders can safely deposit assets. The message is clear: avoid the Channel Islands, and move assets to Pananma, Uruguay or some of the smaller Carribean islands. If I am sittign in Panama City I would say: “gracias”.
It might be a smart idea to apply different penalties, but why would HMRC need to BROADCAST it?
(Interestingly, I have picked up that Brazil is a category 3 country. Now, remmeber Brazil has entered the business of lecturing other major nations about their tax transparency status, going as far as branding Switzerland and even the UNITED STATES as tax havens. Is it a case of what goes around comes around?)