To prevent international evasion of taxes and harmful tax competition, Finland has, in conjunction with the other Nordic Countries, prepared and concluded treaties with certain offshore financial centers concerning the exchange of information on tax related matters. The treaties are part of the tax haven project, set on by The Nordic Council of Ministers, which follows the work of the OECD against harmful tax competition.
The negotiations with the tax havens have been engaged collectively with the Nordic Countries. However, every treaty is bilateral in a way that the parties of every separate treaty ultimately sign the treaty and supervise independently the entry into force of the treaty. At first stage, the negotiations for agreements were opened with the following tax havens: Netherlands Antilles, Aruba, Bahamas Islands, Bermuda, British Virgin Islands, Cayman Islands, Gibraltar, Guernsey, Jersey and Isle of Man.
The effectuation of the treaties on information exchange with the tax havens has required such compensational economical benefits to the tax havens which allow them to develop open economical sectors and diversify their national economy. For this reason the parties have, in context with signing the treaties on information exchange, signed minor taxation agreements to avoid the double taxation. These treaties concern the taxation of individuals, taxation of air transport and shipping as well as the profit adjustment of associated enterprises. The type and scope of the benefits that are admitted to tax havens depend in each individual case on what kind and how broad information exchange the contracting jurisdiction is willing to and capable to undertake.
Bilateral treaties on information exchange and on taxation were signed with Isle of Man in autumn 2007 (Treaty Series 74/2008). Treaties with Jersey and Guernsey were signed in autumn 2008. Finland has also signed treaties with Cayman Islands and Bermuda during the spring 2009. In addition, the treaty with British Virgin Islands has been agreed to conclude in Reykjavik on 18th of May. The negotiations with the other regions have proceeded far with Aruba and Netherlands Antilles.
The treaties on information exchange on tax matters that are made are, with few exceptions, based on the OECD Model Tax Agreement and OECD Model Agreement on Exchange of Information on Tax Matters. Trough the treaties the parties are obligated to grant administrative assistance to each other by means of information exchange. The obligation concerns information that is foreseeably relevant to the administration and enforcement of the domestic laws concerning direct taxes.
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