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Jersey Businesses Challenge Altered Transparency Goalposts

by Jason Gorringe, Tax-News.com, London

08 December 2011


The Jersey Chamber of Commerce, which represents Jersey private sector businesses, has urged the island's decision-makers to pause for thought prior to agreeing to a new raft of demands from advanced nations on tax information exchange.

Commenting following the recent G20 summit in Cannes, the Chamber urged consideration of the issues arising in relation to tax information exchange agreements (TIEAs) and the implications for the territory.

“Barely two months after celebrating approval by the EU of Jersey's zero/ten corporate tax regime, Jersey is having to respond to yet another round of political sound-bites directed by some members of the G20 against what they term 'tax havens'," Rob Kirkby the Chairman of the Chamber's Finance Committee, wrote on the Chamber's website.

“Proposals were put forward at the summit for even greater transparency over tax matters, changing the manner in which TIEAs operate, with some G20 members pressing for a move to automatic exchange of information. Whilst few would argue against the aim of preventing the erosion of tax revenues by unlawful evasion techniques, some of the proposals may lead to quite draconian measures that could well have the effect of eroding rights to privacy,” he warned.

Noting the progress made by the territory since the turn of the century, the Chamber highlighted that Jersey has made significant strides, signing a total of 25 TIEAs, to promote best standards in tax transparency, and has signalled its intent to continue this process.

“[However] the G20 are now arguing that the process needs to be taken further. President Sarkozy of France, who chaired the G20 summit, caused some controversy when he called for eleven countries, including Switzerland, to be 'ostracized' for failing to implement TIEAs in an effective manner; he then proceeded to call on the OECD's Global Forum to adopt automatic exchange as the standard practice, rather than the exchange of information upon request, as provided for in TIEAs,” Kirkby observed.

Kirkby said that Jersey has demonstrated that it is a cooperative member of the international community, willing to assist in fighting tax evasion by entering into and complying with TIEAs. He also noted that Jersey's finance industry has actively worked to prevent the island’s use by tax evaders, through introducing and complying with obligations under the island's 12 year old anti-money laundering regulations. "We should therefore pause for breath before further moving beyond these arrangements,” he cautioned.

“We continue to work in a competitive international environment and moving ahead with these new provisions ahead of the competition may impact the island’s attractiveness as a centre for our private client industry and provide a competitive advantage to those jurisdictions who have not signed up," Kirkby concluded.

A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent jurisdictions, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report2.asp
TAGS: tax | offshore confidentiality | law | banking | international financial centres (IFC) | Jersey | offshore | agreements | offshore banking | banking secrecy | G20 | standards | regulation

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