OECD Endorses Guernsey's Info Exchange Frameworks

by Jason Gorringe, Tax-News.com, London

31 January 2011

Guernsey has noted the publication of the Global Forum on Transparency and Exchange of Information for Tax Purposes’ report, confirming that Guernsey’s framework for information exchange with third countries is satisfactory, albeit with a few recommendations presented on minor amendments that could made to enhance the island's regime.

Welcoming the report’s findings, the government noted that it confirmed Guernsey has not only followed through its 2002 commitment to observe the OECD principles on transparency and exchange of information for tax purposes but has made substantive developments in expanding its exchange of information network.

The report also confirms that Guernsey has in place all the necessary legal and regulatory powers to ensure it can meet the internationally agreed standard on obtaining and exchanging information for tax purposes.

Guernsey’s Chief Minister, Lyndon Trott, said, “I am delighted that, hard on the heels of a very favourable report from the IMF, Guernsey has received this endorsement of its legal and regulatory framework from an international body such as the Global Forum. The report confirms Guernsey’s long-standing commitment to meeting international standards. It is another independent endorsement that Guernsey is a well-regulated, transparent and co-operative member of the international community.”

“Guernsey committed to the OECD’s principles of transparency and exchange of information for tax purposes in 2002, and this report clearly demonstrates that that undertaking was no hollow exercise. The fact that this report was prepared by our peers in the Global Forum, and has measured Guernsey’s system as being equal to some of the largest and most important countries on the planet, acknowledges Guernsey’s place in the premier league of financial centres committed to international standards of probity.”

The report says: “Guernsey has made substantive developments in expanding its [exchange of information] network, predominantly since 2006, and this has been combined with the development of a complementary domestic process to manage requests received from its [exchange of information] partners.”

In 2009, the Global Forum produced an ambitious four and a half year Peer Review process, the intention of which was to establish a robust and comprehensive process to monitor and review progress made by jurisdictions towards full and effective exchange of information up to the international standards.

Guernsey is scheduled to undergo a Phase 2 review in 2012 where the review team will look at the practical implementation of the exchange of information process. This will involve the Assessment Team visiting Guernsey and evaluating the effectiveness of how the Income Tax Office obtains information and exchanges it with Tax Information Exchange Agreement (TIEA) partners.

Trott added: “I look forward to the Phase 2 Review where I am confident that Guernsey will be given yet another opportunity to demonstrate its strong commitment to meeting its international obligations.”

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