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Guernsey Commits To UK 'Son Of FATCA' Pact

by Jason Gorringe, Tax-News.com, London

15 March 2013


Guernsey is to engage with UK authorities towards the conclusion of a Foreign Account Tax Compliance Act (FATCA)-style agreement, the island's Chief Minister Peter Harwood confirmed on March 14, 2013, explaining that the decision would reinforce Guernsey's commitment to tax transparency and its status as a leading and respected mainstream international financial center.

In a decision that will mirror that already undertaken by Isle of Man authorities, it is proposed that Guernsey and the UK will agree the following: a framework to enhance tax information reporting in line with FATCA principles through an intergovernmental agreement (IGA) with the UK; an alternative reporting model for non-domiciled UK tax residents; a revised double tax agreement; and a disclosure facility.

Both the proposed UK IGA, and an IGA under discussion with the United States, will be subject to approval by Guernsey's legislative assembly, the States of Guernsey, later this year, the Government said.

In agreeing to a UK agreement in principle, Harwood stated: “Guernsey is fully committed to combating tax evasion and the principle of automatic exchange. Our twin IGA approach to US/UK reporting will provide our industry with a very strong platform to compete on the world stage against weaker, less transparent and less compliant jurisdictions."

“The agreement that we are working towards with the UK will be consistent with our belief that Guernsey's long-term sustainable economic future is best served by safeguarding our position and reputation as a respected, well regulated, tax transparent jurisdiction. With such a UK agreement; automatic information exchange under the European Union's Savings Directive; and importantly an IGA arrangement with the US for FATCA now almost concluded, we believe Guernsey business will have both certainty and a competitive advantage.”

Fiona Le Poidevin, Chief Executive of Guernsey Finance - the promotional agency for the island’s finance industry, added: “Guernsey’s statement of intent to finalize a tax package with the UK is another clear demonstration of the island’s position as a well regulated and compliant international finance center and of our strong relationship, as a Crown Dependency, with the UK."

“The news will provide certainty to our client base and reinforce the message that we are committed to tax transparency and to being a cooperative global partner. The direction shown by our Government in this regard is a clear indicator of our position as a leading international finance center both now and well into the future.

“I’m also pleased that we are close to reaching an agreement with the US on FATCA and can move forward positively to concluding both IGAs in the near future.”

TAGS: compliance | Finance | tax | business | tax information exchange agreement (TIEA) | tax compliance | tax avoidance | Guernsey | United Kingdom | offshore | agreements | United States | mutual assistance agreement | Compliance

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I guess when nobody banks in Guernsey anymore, the realization will strike that people just don't want to do private banking in a glass bowl.

Dan Redding on Friday, March 15, 2013

 






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