Jersey Denounces TUC's Tax Haven Report

by Robert Lee, Tax-News.com, London

03 February 2009

Jersey has defended its position after a report from the British Trades Union Congress (TUC) called for the UK government to force banks which have received public money to disclose details of their offshore subsidiaries.

The TUC’s report claims to show that Lloyds TSB, RBS, HSBC and Barclays have between them well over a thousand subsidiary companies (1,207) incorporated in ‘tax havens’. The most popular location is the Cayman Islands with 262 companies, while Jersey is second, with 170 companies.

The TUC conceded that "not every subsidiary located in a tax haven or financial secrecy jurisdiction will necessarily be used for tax avoidance."

"Some may be simply providing banking services to the local population and business community of countries such as Ireland - or have particular commercial links to countries such as HSBC's ties to Hong Kong,” its statement acknowledged.

However, TUC General Secretary Brendan Barber said that the report highlights the much-discussed issue of banking secrecy and "raises questions about whether part of the objective is avoiding paying a fair rate of tax to the UK."

Denouncing the TUC’s report, Jersey Finance, the body responsible for promoting the jurisdiction's finance industry responded in a statement that:

"There is no credible or practical evidence to suggest that international financial centres threaten financial stability. Jersey is a well-regulated jurisdiction which meets or exceeds all of the relevant international financial standards for financial stability and transparency expected from the world’s leading financial centres."

"Well regulated financial centres such as Jersey provide a broad range of services which are not related in any way to tax evasion. Under the EU Savings Directive all UK resident private individuals with assets in Jersey are subject to either full information exchange with UK tax authorities or withholding tax."

"Furthermore, whilst Jersey adheres firmly to the principles of confidentiality for legitimate investors, Jersey has never had banking secrecy laws, and has implemented measures to ensure that it can co-operate with any country in the world when investigations are underway into criminal and fraudulent use of the global financial services system."

Recommended