UK Welcomes Jersey's Progress On Tax Transparency

by Jason Gorringe, Tax-News.com, London

29 June 2009

UK Treasury Minister Stephen Timms has welcomed Jersey’s progress in signing Tax Information Exchange Agreements, which he says is strengthening the jurisdiction’s reputation as a jurisdiction committed to "good governance in tax matters."

Noting that Jersey recently concluded its fourteenth agreement, Timms, Financial Secretary to the Treasury, said: "I warmly welcome Jersey’s continuing progress in concluding Tax Information Exchange Agreements. Jersey’s firm commitment to transparency and exchange of information in tax matters is very encouraging, and I call on others to follow their example”.

The UK Treasury also commended Jersey’s anti-money laundering legislation and practice, counter terrorist financing legislation and financial regulation, and the Island's participation in international efforts to combat such crimes.

The UK statement was welcomed by Jersey’s Deputy Chief Minister, Philip Ozouf, who said: “The Financial Secretary to HM Treasury, Stephen Timms, has welcomed our progress in signing Tax Information Exchange Agreements, and has stated clearly that this strengthens our reputation as a jurisdiction committed to good governance in tax matters.

He added: “We have recently concluded our fourteenth TIEA, by signing with Australia earlier this month. We plan to continue this programme of negotiating agreements, which began with the USA in 2002. The next TIEA signing we have scheduled is with New Zealand.”

Jersey has also signed TIEAs with Denmark, Faroe Isles, Finland, France, Germany, Greenland, Iceland, Ireland, Netherlands, Norway, Sweden and the United Kingdom.

In its progress report on the implementation of the internationally agreed tax standard, issued in conjunction with the G20 London Summit of April 2, the OECD listed Jersey as a jurisdiction that has “substantially implemented” said standard and thus gained a place on the Organization’s ‘white list’ of compliant jurisdictions.

However, this did not prevent UK Prime Minister Gordon Brown writing to the governments of the Crown Dependencies shortly after the G20 summit with the veiled threat of sanctions should they deviate from this policy of transparency.

“I think it is particularly important that the Crown Dependencies continue to set the pace in this process and put clear water between themselves and those jurisdictions which only just meet the international standard,” he wrote. “If genuine progress in agreeing, implementing and abiding by these agreements does not continue to be made I will encourage the G20 to look at the issue again until all abide by the highest standards."

Brown also broached new territory in suggesting that future international tax transparency standards may extend to tax avoidance – as opposed to tax evasion – which is perfectly legal in many jurisdictions.

"Similarly, as all international efforts on harmful tax practices start to refocus on the issue of tax avoidance, it will be vital to the interests of the Crown Dependencies that they can readily meet the new international standards which emerge," Brown wrote.

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