Cayman To Stand Firm Over EU Savings Tax Directive

by Amanda Banks, Tax-News.com, London

19 November 2002

Responding to a letter received earlier this month from Baroness Valerie Amos with regard to the European Union's Savings Tax Directive, Cayman's Leader of Government Business, the Hon. McKeeva Bush announced that the jurisdiction would be standing firm on the issue.

The Caymanian authorities had written to the British government to request that a Working Party be established under Article 7 of the OCT Decision in order to discuss the jurisdiction's concerns with regard to the Savings Tax Directive.

However, according to the Cayman Net News service, Baroness Amos' letter in reply merely asked the government to reconsider its position, and to confirm by November 15 whether it would be prepared to go along with the EU initiative.

In a statement released following receipt of the Foreign Office Minister's communication, Mr Bush announced that: 'We have repeatedly stated that, while we can understand the position of the United Kingdom and the other members of the European Union in relation to their domestic economies, and we remain willing to discuss matters related to the EU tax package, such discussions can only move forward in a direction and in a context which safeguards the interests of the Cayman Islands.'

Referring to the reason why the United Kingdom is so keen to avoid the imposition of alternative measures - such as the withholding tax proposed by Switzerland - the Leader of Government Business continued:

'These matters are unlikely to be resolved in the short term but we remain resolute. The interests of the UK's Eurobond market are of importance to the United Kingdom but no more so than our financial services industry is to us. We have fully considered our options and those of the EU and are confident that our position is correct both morally and legally.'

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