Guernsey 15th on 'disreputable' worst tax-haven list

Friday 31 May 2019

Guernsey's ranking of 15th on a new index of the worst tax-havens in the world is not a concern, according to the States, because the list makes incorrect assumptions, and 'lacks credibility'.

The TJN - Tax Justice Network - Index was released earlier this week, ranking corporate tax-havens on how 'aggressive' they were. It worked this out by assigning a score to 20 different factors - Guernsey and Jersey both had a 98/100 score.

Jersey was ranked 7th, Guernsey 15th and the Isle of Man 17th - Jersey was more 'aggressive' than Guernsey because the island has more foreign money harboured there.

But the States of Guernsey were not concerned with this ranking, as they dismissed the index as having no proper methodology and lacking credibility. 

"For example, assumptions about privacy and data protection are labelled as secrecy and where the island does not offer any preferential regimes, or a criteria is deemed non-applicable, the maximum score is still applied.," a spokesperson for P&R said.

Deputy Gavin St Pier's P&R have always staunchly defended Guernsey's position as a fully compliant and transparent jurisdiction - something that is always affirmed by the EU not including the island on their tax 'blacklist' or 'greylist'. 

Guernsey was briefly added to a Netherlands tax blacklist last year.

The spokesperson continued: "Guernsey meets international standards on tax transparency and cooperation. In March 2019, after a detailed assessment, the EU reaffirmed our status as a cooperative jurisdiction when compiling its tax ‘blacklist’, the island was deemed a cooperative jurisdiction for its standards of tax transparency, fair taxation and anti-BEPs compliance. Furthermore, in 2018, the island introduced a legal substance requirement further demonstrating that the profits accounted for in Guernsey are the result of real economic activity. None of these factors have been taken into account in the compilation of TJN’s political campaign."

Along with the release of the index, the TJN said it wanted to see a more towards unitary taxation, meaning corporations are taxed where they do business, rather than where they have their HQ. 

Pressure has been coming from the UK for Guernsey to make its Beneficial Ownership Register public. 

In an interview with the BBC, a UK government spokesperson 'described tacking tax avoidance as a "priority" and said they had been at the "forefront of international action"'.

P&R's spokesperson concluded: "Guernsey is a leading jurisdiction and is part of the solution in the fight against financial crime. What Guernsey will do, and has been doing for some considerable time, is continue working with other jurisdictions, including Jersey, the Isle of Man and the European Union.  One example is our work to evolve a global norm in relation to beneficial ownership registers.

"We expect this emerging international standard will result in more registers of beneficial ownership that contain reliable, verified and up-to-date information, as Guernsey’s currently does.”