Guernsey: Guernsey's Chief Minister Backs 'G5 Pilot'; Supports UK On Tax Standards
Last Updated: 13 May 2013

Guernsey's Chief Minister, Peter Harwood, has written to UK Prime Minister, David Cameron, welcoming the 'G5 pilot' on multilateral automatic information exchange for tax purposes as the next step in creating common global tax standards.

In an open letter to Mr Cameron, the Chief Minister said that he welcomed the announcement by the UK, along with France, Germany, Italy and Spain to pilot multilateral automatic information exchange based on the agreements with the USA in relation to the Foreign Account Tax Compliance Act (FATCA).

The Chief Minister wrote to Mr Cameron: "We support your efforts to ensure that the OECD adopt multilateral automatic information exchange as a new global standard...Guernsey firmly believes that common global standards are the most effective method of fighting fraud and tax evasion."

The Chief Minister noted that Guernsey was on the original OECD 'whitelist' and its parliamentary assembly has a clear policy objective of continuing to meet international standards on tax transparency, including maintaining  OECD 'tier one' status. He also reminded Mr Cameron how Guernsey had chosen to automatically exchange information under measures equivalent to the EU Savings Tax Directive (EUSTD) - "a practise still not met by some EU Member States."

He added that Guernsey made an early announcement of its intent to enter into an Intergovernmental Agreement (IGA) with the USA regarding FATCA and earlier this year, he had announced Guernsey's intention to finalise a draft agreement on a proposed 'tax package' with the UK. That package includes an agreement in principle to enhanced reporting of tax information along FATCA principles through an IGA with the UK, with alternative reporting arrangements for non-domiciled UK tax residents (non-doms) and an agreement to negotiate a revised Double Taxation Arrangement (DTA) with the UK.

The Chief Minister said that the IGAs with the UK and the US will be subject to the proper decision-making process of Guernsey's parliamentary assembly and will be presented for approval later in the year.

 "At that juncture I would be willing to present a report and a recommendation on [Guernsey] joining the G5 pilot on the assumption that there is sufficient information and detail on the pilot to inform the report and the decision," he wrote.

Commenting on the letter, which has been made public, Fiona Le Poidevin, Chief Executive of Guernsey Finance - the promotional agency for the Island's finance industry, said: "It is extremely positive to see that the Chief Minister has given the UK Prime Minister a clear message that Guernsey supports the principle of multilateral information exchange as a common global standard and as such, subject to more information and detail, he would support us joining the G5 pilot.

"This shows that once again, Guernsey is at the very forefront of international developments regarding transparency and exchange of information for tax purposes and therefore our current and future clients can have confidence in Guernsey remaining a leading international finance centre well into the future."

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