The EU has confirmed Guernsey has proven itself as a 'cooperative jurisdiction with respect to tax good governance' following months of work to address previously raised concerns.
The Economic and Financial Affairs Council of the European Union (ECOFIN) said today that it has "reaffirmed its previous decision" and it hasn't put Guernsey on the latest 'blacklist'.
ECOFIN has published an updated EU list of non-cooperative jurisdictions and on the basis that Guernsey has met an agreed commitment to address general concerns raised by the EU in 2017 in relation to legal economic substance requirements, the island hasn't been included in the black list.
The States of Guernsey says this confirms that "not only does Guernsey meet the international standards of tax transparency, the principles of fair taxation and is committed to fighting base erosion and profit shifting but now also addresses any concerns that profits were not commensurate with the actual economic substance in the island."
ECOFIN’s decision also follows a further commitment made by Guernsey in December 2018 to work with the EU on sharing beneficial ownership information, such as through an integrated platform.
Deputy Gavin St Pier welcomed this decision. "I was confident that any objective process would produce this outcome," he said. "We have consistently maintained as a matter of fact, that we are a jurisdiction of substance. We have worked closely with the EU, Jersey and the Isle of Man to demonstrate the existence of robust legal substance.
“I hope that it is now clear to EU Member States that they can have confidence in the work of the CodeGroup and consequently there is no further role for national blacklists, the basis of which are often arbitrary and prepared without any dialogue.
“As we have repeatedly said, including most recently to UK MPs in another context, Guernsey does not facilitate financial crime, including tax fraud. We adopt the highest standards and we are willing to cooperate with our neighbours to address reasonable concerns. We remain committed to ongoing co- operation and dialogue with the EU institutions. We stand ready to help other jurisdictions, including any relevant EU Member States, develop and implement substance requirements.”
Pictured: Deputy Gavin St Pier.
As part of this work, the States of Guernsey have committed to implement Mandatory Disclosure Rules during 2019. It has also built on its commitment to develop a new international standard for the exchange of beneficial ownership information by committing to working with the EU so that corporate beneficial ownership information can be more readily shared on a reciprocal basis.
Deputy St Pier added: “Our commitment to work with the EU on sharing beneficial ownership information, such as through an integrated platform, is evidence of our desire to be a true global leader in this area. We have demonstrated once again that Guernsey delivers on its commitments and can hold its head high as an exemplar of good practice.
“Developing and implementing in short order the change to which we had committed, required closecooperation between government and industry. I would like to thank all those involved as well as the Code Group and the EU Commission for their engagement during this process.
“International taxation and cross-border cooperation has been and is likely to remain a rapidly evolving area, particularly if the EU moves to harmonise corporate taxation after the UK has left the EU. As we have for some time, we will continue to monitor and as necessary evolve our own domestic regime inresponse to international developments.”
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