OECD Expresses More Cooperative Tone Towards Jersey

by Jason Gorringe, Tax-News.com, London

22 July 2003

In a marked change of tone since the OECD placed Jersey onto its blacklist of harmful tax havens back in 1998, the Paris-based organisation is now offering to assist the jurisdiction in its proposed tax reforms.

'We are pleased to now see the positive side of the work of the OECD and I am sure that we can learn from their vast international experience,' said Policy and Resources Committee president Frank Walker in a Jersey Evening Post report.

According to the JEP, the organisation conceded to being 'naïve and impatient' when writing its 1998 report on harmful tax practises, and is now taking a more constructive approach to negotiations, which includes assisting Jersey in its proposal to introduce a zero rate of corporate tax.

'All we would ask is that there is transparency and co-operation between jurisdictions,' commented Jeffrey Owens, head of the centre for tax policy and administration at the OECD whilst speaking at a conference this week. 'The Island is leading the move away from competition based on secrecy towards competition based on skills and services in a well-regulated environment. We support this and are happy to offer our knowledge and experience as Jersey changes its tax regime to remain competitive,' he added.

Mr Owens also raised the issue of tax harmonisation and exchange of information where the OECD and European Union policy conflicts.

'We see increased competition as an inevitable effect of globalisation so we would rather embrace it but make sure it is fair, transparent and open. We also seek effective exchange of information - although our model differs from the European Union in that it is request-based as opposed to automatic, it covers both individuals and corporates, and our focus is obviously far wider than Europe,' stated Mr Owens.

'The EU Savings Directive has not helped our efforts to promote global standards of tax co-operation and, by its decision to allow some countries to establish a withholding tax, it has also raised the level playing field issue. But we see this as an interim solution only and it will not stop our efforts to establish exchange of information on request,' continued Owens.

'There are now only six offshore jurisdictions we deem to be uncooperative," said Owens. "They are Andorra, Liechtenstein, Liberia, Monaco, the Marshall Islands and Nauru."

A comprehensive report on the OECD, FATF and other 'offshore' initiatives, including the EU's Savings Tax Directive, is available in the Tax News Reports Shop at http://www.tax-news.com/reportshop

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