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.
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