Aruba Co-Operates With OECD On Eliminating Harmful Tax Practices

by Amanda Banks, Tax-News.com, London

04 July 2001

The OECD has announced that Aruba has pledged to eliminate its harmful tax practices by 31 December 2005. In a letter sent to the OECD by Dr Robertico R Croes, Aruba's Finance Minister, he outlines certain measures that Aruba is prepared to implement in order to stamp out harmful tax practices according to principles such as effective exchange of information and transparency.

In the case of exchange of information, the government states that it is prepared to enter into 'tax information exchange agreements' with OECD countries that do not presently have an arrangement for exchange of information with Aruba. Domestic laws will also be amended to facilitate a flow of information exchange with international tax authorities.

Current laws relating to transparency will also be amended, 'so as to ensure that information on beneficial ownership of Aruban companies, partnerships and other entities, of managers and beneficiaries of Aruban collective investment funds, is available to its tax or regulatory authorities,' states the letter.

In addition the government will ensure that its regulatory or tax authorities have access to bank information if that information concerns a taxpayer's tax affairs in another state. The maintenance of records will also be made mandatory for all Aruban companies, collective investment funds, managers and other entities conducting business on the Island - whether or not they are resident in Aruba for tax purposes.

In response, OECD Secretary-General, Donald J Johnston replied to Dr Croes confirming that Aruba will not be included on the list of unco-operative tax havens which is due to be published sometime this month. Mr Johnston wrote: 'I am writing to thank you personally for the commitment made by Aruba to join OECD member countries in their effort to combat harmful tax practices. Your willingnes to co-operate in this ongoing effort will bring benefits to Aruba and the other jursidictions participating in the project.'

Aruba has now been invited to participate, together with other co-operative juridictions, in the OECD's upcoming Global Forum meeting in Malta, 10-13 July 2001, to discuss the design and implementation of effective exchange of information agreements.

The full text of the commitment is available on the OECD's website at: http://www.oecd.org/daf/fa/harm_tax/com_Aruba.htm

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