Guernsey is continuing to take steps to build on its position as
a BEPS-compliant jurisdiction.
A year ago the island established a base erosion and profit
shifting (BEPS) working party to assess the OECD's October 2015
BEPS Action Plans, as well as scrutinise the EU Commission's
'BEPS Directive'. The working party is chaired by
Guernsey's Chief Minister, Deputy Gavin St Pier, and includes
Guernsey Finance Chairman Lyndon Trott as well as tax professionals
and representatives of the Guernsey Institute of Directors and the
Guernsey Society of Certified and Chartered Accountants.
Discussions between the working party and local business bodies
have demonstrated that Guernsey is already largely compatible with
the BEPS actions – effectively, a BEPS-compliant jurisdiction
– due to Guernsey's finance sector model and a regulatory
framework which prevents the island being exploited significantly
for BEPS and ensures equivalent outcomes to those that both the
OECD and EU Commission are seeking to secure.
After prioritising the work on BEPS, Guernsey has taken five
Guernsey has joined the BEPS
Inclusive Framework, through which it is actively committed to the
development and implementation of global standards in line with the
BEPS Action Plans.
Guernsey has accepted an invitation
from the OECD to join the Ad Hoc Group on the Multilateral
Instrument (Action 15). Guernsey is one of a very small number of
non-States invited to join the group and has subsequently played an
active role in the drafting of the instrument and ensuring that the
instrument is effective.
Guernsey's government has
committed to signing the BEPS Multilateral Instrument (to take
place in June 2017) in order to implement tax treaty-related
measures to combat BEPS.
Guernsey has signed up to the
Multilateral Competent Authority Agreement (MCCA) to assist with
the sharing of relevant information in relation to Country by
Country Reporting (CbCR) (Action 13), as well as broadly adopting
the OECD's CbCR implementation package, to facilitate its
implementation of this BEPS minimum standard.
Guernsey has already put in place the
relevant implementing regulations for CbCR.
"Guernsey is already in a leadership position on tax
transparency, and we are also now very well-placed on the evolving
BEPS international standards," said Deputy St Pier.
"Over the past 12 months we have taken significant steps to
demonstrate our commitment to this agenda, and we will continue to
do so. Our position as a 'BEPS-compliant' jurisdiction is
important for the global tax transparency agenda and provides
stability, competitiveness and opportunities for our finance
"It is acknowledged that Guernsey, as a third country with
a strong financial services sector, will be involved throughout
2017 in an EU-Code Group process that will assess third countries
against the EU's updated good governance criteria. Guernsey
welcomes this as an opportunity to further demonstrate that it
clearly meets international good governance standards in relation
to transparency, automatic exchange of information and fair and
competitive taxation. We are confident that the Code Group will
acknowledge Guernsey's actions and position on BEPS as a
positive factor, encouraging other jurisdictions to follow
Information has also been provided to the body reviewing the
existence of preferential tax regimes (Action 5) to demonstrate
that Guernsey has no such regimes, and assistance will be given in
respect of the various Peer Review processes that are being
introduced to ensure compliance with BEPS minimum standards.
Guernsey is now working on formulating and implementing the
necessary internal processes in respect of information on rulings
(Action 5) and dispute resolution (Action 14).
The Guernsey International Business Association (GIBA), the
Guernsey International Insurance Association, the Guernsey
Association of Trustees, the Guernsey Investment Funds Association
and the Association of Guernsey Banks were all consulted by the
GIBA Chairman Patrick Firth commented: "Guernsey is already
largely compatible with the BEPS actions due to our long-standing
focus on business substance. The steps taken over the last year are
encouraging and demonstrate Guernsey's commitment to being a
'BEPS-compliant' jurisdiction. As we are ahead of a good
number of jurisdictions in this process, now is a key time for
finance businesses to be identifying the opportunities arising as a
When Walkers was launched as an offshore law firm in 1964 in the Cayman Islands it is fair to assume that the founders would never have dreamt their creation would, fifty years later, be working in a cross-border restructuring market driven by China.
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