Tuesday 25 June 2019
Select a region

Guernsey is "part of the solution, not the problem"

Guernsey is

Friday 04 January 2019

Guernsey is "part of the solution, not the problem"


The States will be continuing to work with the Netherlands, despite Guernsey being placed on a 'tax blacklist' - with Deputy Gavin St Pier insisting the island is "part of the solution, not part of the problem."

Responding to the news that the Netherlands had blacklisted Guernsey, as well as Jersey and the Isle of Man, the Policy and Resources President said again that Guernsey is "fully compliant" and is a "co-operative jurisdiction."

In a statement to the media, Guernsey's Chief Minister said he would "continue to engage with all interested parties and jurisdictions, including the Netherlands, to ensure they properly understand the important role Guernsey plays in international capital markets and that we are in fact part of the solution, not part of the problem.”

The Netherlands Junior Tax Minister announced the move to blacklist Guernsey on Twitter between Christmas and New Year. Menno Snel said: "By drawing up our own, tough blacklist, we are showing again that we are serious in our battle against tax evasion. 

"And this is just one of the measures we are taking," he added.

However, Guernsey has had a Tax Information Exchange Agreement with the Netherlands since 2008.

That document means both jurisdictions agreed then to share information on matters such as income tax, company tax, dividend tax and inheritance tax.

Screenshot_2019-01-03_at_09.29.49.png

Pictured: Guernsey already has a Tax Information Exchange Agreement with the Netherlands, but that hasn't stopped the jurisdiction putting Guernsey on its tax blacklist. You can read the TIEA and find out more about it here. 

Deputy St Pier has been vocal in the past about his efforts to stop the misrepresentation of Guernsey as a 'tax haven' or for enabling tax evasion. 

His view is that Guernsey is "cooperative" and that it remains "fully compliant" as previously stated by the OECD.

Deputy St Pier's statement can be read in full below:

“In 2017 the EU created its own central list of uncooperative jurisdictions.  This was an initiative designed to address shortcomings and various methodologies used in the lists maintained by various EU Member States.  Following the screening of over 90 jurisdictions, in December 2017 Guernsey was found to be a cooperative jurisdiction; at this time the States made a commitment to address concerns raised by the EU during the screening process relating to a new concept of legal substance requirements. Legislation was designed to address these concerns and was put in place by 31 December 2018.  This new legal substance regime is due to be reviewed by ECOFIN during the first quarter of 2019.  We are confident that Guernsey’s new legal substance requirement is a proportionate and effective response to the concerns raised and will receive a positive assessment by the EU.

“The EU screening exercise in 2017 looked at principles of tax transparency, fair taxation and compliance with the OECD’s anti-BEPs initiative.  Whilst it is disappointing that the Netherlands have copied a number of other places and gone beyond the EU’s own listing exercise, by adopting a list that includes jurisdictions on the basis of the rate of corporate tax alone, specifically those lower than 9%, it is recognised that it is its sovereign right to do so.  Such a reliance on tax rates only does not take into account transparency. Guernsey was rated as fully ‘compliant’ by the OECD against the international standards relating to exchange of tax information on request in July last year.  This is a rating that exceeds those of some EU Member States including the UK, Germany and Belgium; the Netherlands are yet to be assessed in the second round of peer reviews against the same criteria and currently are still rated as only “largely compliant’ which is a lower assessment than our own.

“We will of course continue to engage with all interested parties and jurisdictions, including the Netherlands, to ensure they properly understand the important role Guernsey plays in international capital markets and that we are in fact part of the solution, not part of the problem.”

Pictured top: Deputy Gavin St Pier. 

Sign up to newsletter

 

Comments

Once your comment has been submitted, it won’t appear immediately. There is no need to submit it more than once. Comments are published at the discretion of Bailiwick Publishing, and will include your username.

There are no comments for this article.

To place a comment please login

You have landed on the Bailiwick Express website, however it appears you are based in . Would you like to stay on the site, or visit the site?