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Multilateral Moves Ongoing

Kitty Miv, Editor
24 February, 2021

Following on from last week's EU focus, we will this week be looking at the various multilateral tax initiatives in play at the moment, starting with... you guessed it, the EU, which recently published the latest version of its 'blacklist' of jurisdictions deemed to be uncooperative for tax purposes.

Various of the territories included on the list had hoped to secure removal from it this time around, putting in place reforms to the disputed aspects of their tax regimes in order to do so.

The Seychelles Ministry of Finance, for example, expressed confidence that it would be removed, announcing in a statement that: "The Seychelles has taken the key steps in reforming its territorial tax regime to address concerns of the European Union (EU). Together with addressing the concerns of the Global Forum on Transparency and Exchange of Information for Tax Purposes, these changes are intended to ensure that the Seychelles is removed from the EU's list of non-cooperative jurisdictions later this year."

The Ministry explained that the Business Tax (Amendment) Act, 2020, which was enacted on December 28, 2020, narrows the scope of the exemption from tax for foreign income, in addition to updating the definition of "permanent establishment" to align with the latest model definitions of the Organisation for Economic Cooperation and Development (OECD) and the United Nations.

Further, the Ministry outlined the work the territory has been undertaking on tax transparency, having been rated only "partially compliant" by the OECD Global Forum in 2020.

However, following the most recent review, it emerged that only Barbados had been removed from the list, with Dominica having been added.

Following the February 2021 update, there are 12 jurisdictions on the list of non-cooperative jurisdictions: American Samoa, Anguilla, Dominica, Fiji, Guam, Palau, Panama, Samoa, Seychelles, Trinidad and Tobago, the US Virgin Islands, and Vanuatu.

The OECD, meanwhile, on February 16 released the final batch of BEPS Action 14 peer reviews, on the efforts of 13 jurisdictions to improve how they resolve tax-related cross-border disputes.

The stage 1 peer reviews were for Aruba, Bahrain, Barbados, Gibraltar, Greenland, Kazakhstan, Oman, Qatar, Saint Kitts and Nevis, Thailand, Trinidad and Tobago, United Arab Emirates and Vietnam.

The OECD has now published stage one peer review reports for all jurisdictions and published three batches of stage two reports. In total, 82 stage one peer reviews and 37 stage one and stage two peer reviews have been finalized, with the fourth batch of stage two reports to be released in a few months.

Of the recently assessed jurisdictions, Gibraltar, in particular, welcomed the findings, issuing a statement to that effect this week.

The Government welcomed what it viewed as an endorsement of the territory's framework for resolving disputes, with the peer review looking at such matters as taxpayers' access to MAP resolution, how MAP cases are resolved, and how Gibraltar implements a MAP agreement. It further noted that its double tax agreement with the UK was assessed as being fully compliant with the requirements of the Action 14 minimum standard. Further, despite Gibraltar not being involved in any MAP cases or agreements during the period under review, Gibraltar was said to have met, in principle, all the requirements under the Action 14 Minimum Standard in relation to the resolution of MAP cases.

Until next week!


About the Author

Kitty Miv, Editor

Kitty was born in Argentina in 1960 to a Scottish cattle rancher and his Argentine wife. Educated in Edinburgh and at Princeton, Kitty worked for the World Bank as an economist, where she met and married an emigre Iranian banker. During her time with the Bank, Kitty worked in a number of emerging markets, including a spell in the ex-USSR as a Transition Economies Team Leader. Kitty is now a consultant in Brussels and has free-lance writing relationships with a number of prominent economic publications. kitty@lowtax.net


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