[OffshorePrivacy]

Prior to the TIEA most countries worked and still do work within other legal framework such as the MLAT and other treaties, however the OECD wants the TIEA as it is much easier for the requesting country to go after tax cheats for civil tax issues where the MLAT and other agreements do not necessarily cover those and tend to me focused on criminal charges and tax fraud.

[OffshorePrivacy]

Switzerland Signs Twelfth TIEA with Finland

Switzerland and Finland have concluded negotiations on extending administrative assistance in tax matters under Article 26 of the OECD Model Convention and initialed a revised double taxation agreement. The DTA was negotiated in accordance with the parameters decided by the Federal Council.

On March 13, 2009, the Federal Council decided that Switzerland would change policy on international cooperation in tax matters and adopt the OECD standard on administrative assistance in tax matters under Article 26 of the OECD Model Convention. The decision will permit an exchange of information on tax matters in individual cases where a specific and justified request has been made.

Following the Federal Council decision in March 2009, Finland is the twelfth country with which Switzerland has initialled a DTA containing the extended administrative assistance clause after Denmark, Luxembourg, Norway, France, Mexico, the USA, Japan, the Netherlands, Poland, the United Kingdom, and Austria. The initialling is the first stage on the way to a new or a revised DTA. In order to be removed from the "grey list" drawn up by the OECD Secretariat for the G20, the next step is for twelve agreements based on the OECD standard on administrative assistance to be signed. According to the OECD, it is only then that a state substantially implements the internationally agreed standard on administrative assistance in tax matters.

The initialed text is still confidential. The cantons and business associations will now have the opportunity to submit their views. The Federal Council will then decide on whether to authorise the signature, after which the agreement will be published.

[OffshorePrivacy]

The Netherlands Signs TIEAs With Anguilla And Turks

Dutch Secretary of State Jan Kees De Jager has welcomed agreements for the exchange of tax information between the Netherlands two Caribbean territories, signed on July 22.

The agreements were signed in London and upon entry into effect will provide the respective countries’ tax authorities with tax information where there is evidence of the perpetration of a tax crime. The agreements are among the first for Anguilla and the Turks and Caicos Islands, who also, during the course of the London trip, signed agreements on tax information exchange with Ireland.

In a statement, Jan Kees De Jager lauded steps taken by Anguilla and the Turks and Caicos Islands to increase fiscal transparency, and actualize their commitments to the OECD standard.

De Jager announced that further negotiations are currently being held on similar agreements with the British Virgin Islands, other Caribbean territories, countries in the Pacific Ocean, Austria, Monaco, San Marino, Andorra, Gibraltar, Malaysia, Singapore and Panama.

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[OffshorePrivacy]

Bermuda Concludes TIEA With Ireland

Bermudan Minister of Finance Paula Cox announced on July 27 the signing of a tax information exchange agreement (TIEA) with Ireland. The TIEA was signed at the Irish Department of Finance by Minister Cox and Irish Minister of Finance, Brian Lenihan.

Following the signing, Minister Cox said she was delighted to be in Dublin to sign the agreement with Ireland and thanked Minister Lenihan for making every effort to sign with Bermuda so quickly, especially given the importance that the OECD attaches to the number of TIEAs signed by each country.

“This marks Bermuda’s 14th signed TIEA and demonstrates, once again, that we are far from complacent about our current standing on the OECD white list, nor about reaching the internationally agreed standard of 12 signed TIEAs set at the April 2 meeting of the G20, or the original OECD standard of 12 signed TIEAs with members of the OECD which we undertook to complete prior to the 2009 Global Forum scheduled to meet in Mexico on September 1, 2009. I am extremely pleased to note that prior to this important forum, Bermuda adheres to both versions of the OECD standard.”

Minister Cox said that Bermuda was the first country to ascend from the grey list to the white list, a feat now acknowledged by global observers. “Now Bermuda may claim another first – we are the first of the British Overseas Territories to join the three Channel Islands – our constitutional cousins - in having met the G20 standard as well as the original OECD standard.”

“We pledged to support the OECD initiative as early as 2000 and participated on the committee that penned the OECD Model TIEA of 2002. We have, in so many ways, worked assiduously to strengthen worldwide tax cooperation," she noted.

“Our commitment to the principles of fair tax competition and international cooperation in tax matters extends back to 1988 when Bermuda signed a TIEA with its largest trading partner, the United States of America.”

In addition to its agreements with the United States, the United Kingdom, Australia, New Zealand, the Nordic Group, the Netherlands, Germany and Ireland, Bermuda has concluded negotiations with a number of other countries with whom signing dates are being arranged for the very near future as they conclude their ratification processes.
“The government of Bermuda is involved in several negotiations at present and is closing in on its goal to have TIEAs in place with all G7 countries and other important international trading and commercial partners. Most importantly, Bermuda continues to not only meet but exceed standards set by the OECD Global Forum's annual assessments for effective exchange of information after one has signed a tax information exchange agreement, and we are confident that we have the legislative framework in place to well-position ourselves for the forthcoming model peer review process as our TIEA partners have publicly commended Bermuda on how effectively we exchange information,” Minister Cox concluded.

[OffshorePrivacy]

Jersey And New Zealand Sign TIEA

Building on its ongoing work to increase fiscal transparency, which began with the signing of its first Tax Information Exchange Agreement with the USA in 2002, Jersey concluded its fifteenth TIEA on July 28 with New Zealand.

The agreement was signed at the New Zealand High Commission in London by Jersey Chief Minister, Terry Le Sueur, and New Zealand’s High Commissioner to the United Kingdom, Derek Leask.

Commenting on the signing, Le Sueur said, “New Zealand has joined other jurisdictions in welcoming Jersey as a member of the community of nations committed to international cooperation and information exchange on tax matters and has affirmed that Jersey will be treated accordingly by the New Zealand authorities.

"This agreement is further evidence of our willingness to support the G20 and other international initiatives. This includes our willing compliance with international standards of financial regulation, anti-money laundering and combating the financing of terrorism.

“In a letter to the British Prime Minister, after the G20 Summit in April, I stated that Jersey intended to reinforce its position on the OECD ‘white list’ of countries that have substantially implemented the internationally agreed tax standard by the signing of more TIEAs. Today’s agreement signed with New Zealand is an important contribution to this ongoing process.”

With the New Zealand agreement, Jersey has signed 15 TIEAs, 13 of which are with OECD Member States. Jersey is close to signing a TIEA with Italy and is working to complete negotiations on similar agreements with Canada and Spain. Jersey has extended invitations to enter into TIEA negotiations with all G20 countries that are not OECD members, and with the remaining OECD member countries.

[OffshorePrivacy]

Bahamas Expanding TIEA Network

Bahamian Prime Minister Hubert Ingraham has announced that, following the Bahamas’ commitment to adhere to the OECD standard on transparency and information exchange and begin negotiations with third countries in March 2009, it is nearing the conclusion of several agreements, and will conclude at least twelve agreements by the end of the year.

According to a statement from the government, negotiations with Canada, the United Kingdom, Australia, Spain, Germany, France, Turkey, and the Nordic countries (Norway, Sweden, Finland, Denmark, Iceland, Greenland and the Faroe Islands) for Tax Information Exchange Agreements (TIEAs) are ongoing, but will be concluded by end-2009 in order to gain a place on the OECD’s white list of territories that have substantially implemented the internationally agreed standard.

Negotiations have also recently been initiated with China, and the Bahamas proposes to extend an offer to initiate negotiations with Mexico, Brazil, Ireland, South Africa and India.

In order to facilitate increased cooperation with third country’s tax authorities, the government has announced legislative amendments to the Criminal Justice (International Cooperation) Act, which will enable information in relation to tax offences to be transferred upon request.

“The government is confident that these activities will allow the Bahamas to meet the Exchange of Information standards that have been set by both the G-20 and the OECD on the shortest possible timetable and within the given timeframes, in order to avoid any potential adverse listing,” concluded the government’s statement.

[OffshorePrivacy]

OECD Lauds Cooperative UK-Liechtenstein TIEA

Liechtenstein Prime Minister Klaus Tschütscher (pictured) and Stephen Timms, Financial Secretary to the UK Treasury, signed a tax information exchange agreement (TIEA) on August 11. The two countries agreed on a joint model for cross-border cooperation to ensure a due process for past and future tax claims.

"This agreement sets out a pragmatic path that includes in a cooperative way all parties involved: clients, financial intermediaries and both governments," said Tschütscher. "Where the effectiveness of international cooperation in tax matters through OECD standard solutions reaches a limit, we pursued a tailor-made approach. One that ensures legal certainty and helps bridging the individual interests involved," he added.

The TIEA provides for particularly favorable conditions for the self-declaration of clients with tax arrears in the UK. Compared with the UK's recently announced New Disclosure Opportunity for taxpayers, the conditions in the agreement with Liechtenstein include a reduced period for assessing outstanding tax claims and the option of flat-rate taxation. The program will run from 2010 to 2015, and is available to new and existing clients. Under the text of the agreement, British and Liechtenstein authorities will work together to provide guidance on the tax treatment of customers of Liechtenstein financial intermediaries.

"With this agreement we are creating a stable and reliable regulatory framework and for the client the possibility to make use of an attractive option," said Tschütscher.

In a statement, the Liechtenstein government underscored that within the framework laid down by the agreement, the UK will not in any way seek to restrict or discriminate against Liechtenstein's financial services or its economy. It further noted that following the conclusion of the TIEA, the two countries are to negotiate an additional treaty for the avoidance of double taxation. "This meets a central demand of the Liechtenstein government to strengthen the international market access of our industry," Tschütscher explained.

In June 2008, Liechtenstein had already offered EU states the OECD standard on international cooperation in tax matters within the framework of bilateral agreements. On March 12, 2009, the Liechtenstein government expanded this offer and recognized the OECD standard as a binding global standard. Since then, a TIEA has been concluded with the United States, and another has been initialed with Germany.

Lauding the agreement, and its self-declaration provisions, Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, said:

“The announcement shows that the era of bank secrecy as a shield for tax evaders is coming to an end. This confirms Liechtenstein’s willingness to position itself as a legitimate financial center which is prepared to compete on the basis of the services that it provides."

"It also shows that OECD countries are increasingly recognizing the benefits, in this changing environment, of voluntary compliance strategies that encourage taxpayers to come forward and declare income and assets held offshore. I am particularly pleased about the innovative and co-operative design of this joint UK-Liechtenstein initiative which may well serve as a model for other countries," Owens concluded.

....Our main Liechtenstein bank stopped accepting US and UK clients some time ago -- will have to add Germany to this list now.

[OffshorePrivacy]

UK Announces Details Of Liechtenstein TIEA

The UK government has announced details of the “groundbreaking” disclosure agreement with Liechtenstein that will give UK taxpayers with undisclosed accounts in the Alpine jurisdiction the opportunity to disclose income at a reduced penalty, or face having their accounts shut down.

The so-called Liechtenstein Disclosure Facility (LDF) agreement, signed by the two governments on August 11 along with a broader Tax and Information Exchange Agreement (TIEA), will allow penalties on unpaid tax to be capped at 10% of tax evaded over the last 10 years providing that the account holder makes a full disclosure to HM Revenue and Customs (HMRC).

However, those who do not make a full disclosure by the end of the program, which runs from September 1, 2009 to March 31, 2015, will find their Liechtenstein accounts closed down. They may also face penalties on any unpaid tax of up to 100%.

“Today’s agreements are very good news for honest taxpayers and investors everywhere. And they represent a big step forward for tax transparency,” commented Stephen Timms, the UK Financial Secretary to the Treasury, who signed the agreements with Liechtenstein’s Prime Minister, Klaus Tschutscher.

“I am grateful to the government of Liechtenstein for their goodwill, determination and professionalism to find an effective way forward in a difficult and complex area,” Timms added. “HMRC and Liechtenstein government officials have worked extremely hard to arrive at these ground breaking agreements which mean that investors can in future take advantage of the skills and experience of Liechtenstein’s investment and banking services.”

Under the agreement, Liechtenstein financial intermediaries will have to review all clients, identifying those who need to confirm their tax position with HMRC and advising them to do so within a specific time frame. Where a UK investor confirms to the intermediary that they are cooperating with HMRC, the financial intermediary can continue to provide financial services to that person. Where a UK investor cannot confirm that they are cooperating with HMRC, the financial intermediary must withdraw financial services in Liechtenstein or apply various “sanctions.”

The Liechtenstein government is due to introduce new laws to oversee this process.

To take part in the program, investments must either be held in Liechtenstein on August 1, 2009, in which case the person can participate from the start of the facility on September 1, or, if the investments or assets are moved into Liechtenstein after that date, the person can participate from December 1, 2009, at the end of the registration period for the UK’s general offshore income disclosure scheme, known as the New Disclosure Opportunity.

The recovery of earlier years’ tax lost will be restricted to a maximum of 10 years up to April 5, 2009 and the agreement will allow the taxpayer to elect to apply a special composite rate of 40% to cover all taxes on an annual basis without the benefit of any relief or deduction.

Both HMRC and the Liechtenstein authorities expect that by the end of the facility, all UK taxpayers holding assets and investments in Liechtenstein will be “meeting all their UK tax liabilities.”

[OffshorePrivacy]

BVI has signed its 12th (TIEA) with New Zealand

he signing, which took place on August 13, means that the BVI will now be placed on the “white list” of those countries which have “substantially implemented” the internationally agreed tax standard as set by the Organization for Economic Cooperation and Development (OECD).

After signing the agreement on behalf of the BVI at the New Zealand Embassy in Washington, Premier Ralph O’Neal said: “The conclusion of this TIEA demonstrates the commitment of both the BVI and the New Zealand governments to the OECD principles of transparency and effective exchange of information. We are delighted that, in signing this TIEA with New Zealand today, we are now on the OECD’s white list."

He added: “The BVI is committed to cooperation and collaboration through these agreements. Today’s agreement is very much part of an ongoing process. We hope to sign our 13th TIEA with the Netherlands in the very near future and are in discussion with Ireland as well.”

The BVI signed its first TIEA with the United States seven years ago and has engaged in talks with a number of countries since that time. In addition to the US, it currently has agreements with the United Kingdom, Australia, France and the Nordic Alliance including Denmark, Finland, Iceland, Norway and Sweden. In addition, all members of the OECD have been approached and the BVI aims to conclude more agreements over the coming months.

The BVI’s move to the OECD white list means that it now joins the likes of the United States, the United Kingdom, France, Germany and Canada among the group of countries which have substantially implemented the internationally agreed tax standard.

In addition to the BVI, four other jurisdictions have been elevated from the OECD’s’ gray list of countries which have committed to, but not yet implemented, the tax standard since the lists were published after the G20 London Summit concluded on April 2. These jurisdictions include Bahrain, Belgium, Bermuda and Luxembourg.