G20 Findings

Isle of Man Gains Place on OECD
'White List'

In the build up to the recent G20 meeting in London, much press coverage was devoted to the consequences of any agreement being reached over action against ‘Tax Havens’, and what impact this would have on the Isle of Man. G20 Leaders agreed to take note of the most recent progress report on international tax co-operation published by the OECD.

For many years, the Isle of Man has been working with the OECD to strengthen its position as a transparent, well-regulated financial centre committed to meeting international standards on tax co-operation. This has been demonstrated by leading the way in entering into OECD model Tax Information Exchange Agreements with more jurisdictions than any other territory.

The most recent progress report has proven that this strategy has been sound practice, as the Isle of Man now appears on the OECD ‘White List’ of jurisdictions (which includes the UK and United States) that "have substantially implemented the internationally agreed tax standard". Appearing on the White List ensures the Isle of Man's future as a global financial centre and means that it will avoid any sanctions that are eventually taken against ‘Unco-operative Tax Havens’.

This development is doubly positive for Friends Provident International, as our focus has always been on legitimate retirement, tax and estate planning structures rather than a reliance on secrecy and concealment. Therefore, international moves against bank secrecy will have no effect on our proposition other than to increase business opportunities.

In relation to jurisdictions where Friends Provident International has branch operations, the United Arab Emirates also appears on the White List. Singapore appears on a ‘Grey List’ of territories that have given commitment to international tax standards but have not yet substantially implemented this.

Hong Kong does not appear on the list at all. Instead, China appears on the White List, with a small footnote stating that this “Excludes the Special Administrative Regions, which have committed to implement the internationally agreed tax standard”. Both Hong Kong & Macao have given commitments this year to co-operate on international taxation issues.

Jersey G20 Statement

Friday 3rd April 2009

The inclusion of Jersey on the OECD ‘white list’ is a big step in safeguarding the future of the finance industry in Jersey. Following the G20 summit agreement, Jersey has been placed on a list of jurisdictions ‘that have substantially implemented the internationally agreed tax standard’ along with the UK, USA and with many, but not all, of the member states of the European Union. This list has been published by the Organisation of Economic Co-operation and Development (OECD) at the behest of the G20.

In addition to the ‘white list’ which contains 40 countries, there are two other categories, a so called ‘grey’ list of tax havens that have committed to the internationally agreed tax standard but have not yet substantially implemented it and a ‘black’ list of jurisdictions that have not committed to implementing the tax standard.

A number of Jersey’s competitors including Luxembourg, Switzerland and the Cayman Islands have been placed among a total of 38 jurisdictions on the less favorable ‘grey’ list.

We are delighted that the G20 summit has confirmed that Jersey is in the top tier of jurisdictions which meet the highest standards of transparency and regulation. It demonstrates clearly that the Island is not a tax haven and that we are seen as a responsible member of the international community. Jersey is well-placed to continue to provide liquidity to the banking system, critical to aiding the recovery of the global economy. We will be supporting the Government in Jersey as it continues its work with the OECD to further the development of a global level playing field.

Guernsey Welcomes 'White Listing'

The Channel Island of Guernsey, a major captive domicile, has welcomed its 'white listing' by the OECD as a result of the G20 summit in London.

Chief Minister Lyndon Trott said that the Island's inclusion on a white list with some of the world's top financial centers cemented Guernsey's position as an internationally compliant and transparent low tax jurisdiction.

"It has been a long and hard process to get where we are today. Recognition as a jurisdiction which has substantially implemented the internationally-agreed tax standard is nothing more than we deserve," he stated in the announcement. "We are a well-regulated, transparent, co-operative jurisdiction and the international community appears to have embraced that message. I see the news as a massive boost for business in Guernsey and the Island's economy."

The bulletin noted that "Guernsey has signed 13 Tax Information Exchange Agreements and is preparing to sign more as an indication of its commitment to international recognition." The OECD put four countries on a "blacklist," for failing to provide such information (see related article).

Trott added: "We have made it clear throughout the international banking crisis that we did not export instability, we were subjected to it. I believe this validation of Guernsey by the OECD is an opportunity to prosper."
"This puts to bed, once and for all, the myth that the Island of Guernsey is a tax haven. It is not. It is a low-tax jurisdiction which embraces the best of international standards. The stigma of tax haven status should be gone forever." British overseas territories including the Cayman Islands and British Virgin Islands have been excluded altogether, meaning they are effectively blacklisted.