OECD Heaps Praise On Jersey
by Jason Gorringe, Lowtax.net, London
18 May, 2015
Jersey's policies in the area of international tax transparency have been praised by none other than Pascal Saint-Amans, Director of the Organisation for Economic Cooperation and Development (OECD) Center for Tax Policy and Administration, who recently said that the jurisdiction has done a "tremendous job" in contributing to the international tax agenda.
Addressing an audience of more than 400 senior private client tax, trust, and wealth management professionals at the event in London last week, Saint-Amans said that it is important to recognize the role of small jurisdictions in the OECD's work on tax transparency. "We aim to deliver a level playing field for all jurisdictions and Jersey was one of the best and first in grabbing this opportunity to shape the agenda," he said.
It was suggested by participants at the conference that jurisdictions like Jersey, which are perhaps more prepared than others for the introduction of the Common Reporting Standard (CRS), will have a competitive advantage as investors seek out territories that meet or exceed global standards. However, it was also acknowledged that while certain jurisdictions have worked hard to provide a framework for effective information exchange, it is down to companies operating in these jurisdictions to make sure they have the ability, expertise, and technology to make it work.
In another keynote speech at the conference, however, Philip Marcovici, former CEO of LawInContext and former partner at Baker & McKenzie, called on offshore jurisdictions to become more proactive to prevent compliance becoming too high of a barrier to the finance industry, and he also questioned how the increasing flows of data could be guaranteed to be used securely and appropriately by governments, particularly in emerging markets.
Under the CRS, governments will exchange on an annual and automatic basis financial account information, including balances, interest, dividends, and sales proceeds from financial assets. This information will be reported to governments by financial institutions and covers accounts held by individuals and entities, including trusts and foundations. On October 29, 2014, 51 jurisdictions signed a Multilateral Competent Authority Agreement on the automatic exchange of information that will enable "early adopters" to begin sharing data by September 2017.
Nevertheless, despite the potential weaknesses in the CRS, Geoff Cook, CEO, Jersey Finance, who introduced the conference, expressed his satisfaction at Saint-Amans's comments.
"What came across strongly at this event was just how well respected Jersey is not just in its ability to meet international standards of information exchange but also to exceed them, and this was reflected quite powerfully in Pascal's very welcome comments," Cook said.
"Jersey has invested a significant amount of time and energy into positioning itself right at the cutting edge of information exchange and for that reason the introduction of the CRS shouldn't be as big a challenge for Jersey firms as it might be for those in other jurisdictions."
"The certainty this can offer the private wealth community will be a real competitive advantage for Jersey as investors increasingly seek centres that can offer high standards and effective asset protection capabilities," Cook concluded.
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