TCI dodges EU tax haven black list
THE TURKS and Caicos Islands has managed to avoid being placed on the European Union’s tax haven black list.
Although the territory was on the anti-corruption watchdog’s grey list in 2017, prudent financial measures including tax transparency and compliance have prevented international sanctions.
The EU’s grey list consists of jurisdictions from all over the world which do not respect EU anti-tax avoidance standards but have committed to altering their practices.
Those countries on the grey list are usually moved to the black list if they do not honour their commitments.
The black listed jurisdictions face reputational damage and stricter controls on their financial transactions with the EU.
Premier Sharlene Cartwright Robinson in a statement issued on Thursday, June 7, credited the territory’s tax transparency, fair taxation and anti-base erosion, and profit shifting measures for preventing the black listing.
She stressed that although the TCI is a small developing territory with its many challenges, it has to meet all the international transparency and compliance standards in the area of international taxation and reporting in the same manner applicable to developed jurisdictions.
The premier said: “Good governance, fiscal stability, tax transparency and effective legislations are matters of significant importance to assessing compliance with the global financial systems.”
The EU process to set up a tax-haven black list was triggered by publication of the Panama Papers – documents that showed how wealthy individuals and multinational corporations use offshore schemes to reduce their tax bills.
The TCI was one of eight jurisdictions placed on a grey list, partly as a result of the 2017 storms.
Caribbean islands hit by hurricanes last year were given more time to comply with EU tax transparency standards when the black list was established in December 2017.
The premier along with several senior government officials with private sector partnership engaged the EU Code of Conduct Group in February 2018 in Brussels to start the dialogue and conversation of matters of mutual interest.
“The dialogue with the EU Code of Conduct Group responsible for the compilation of the non-cooperate list continued with the Ministry of Finance, Exchange of Information Unit, Attorney General Chambers, Financial Services Commission and private sector representative and led to a commitment letter to examine the impact of proposed changes to TCI business models, particularly in the financial services sector.”
The premier said the TCI Government was able to demonstrate to the EU Code of Conduct Group significant legal and operational reforms implemented in the area of tax transparency and reporting.
The Chair of the Code of Conduct Group communicated with the premier by email on June 7 indicating that the Turks and Caicos Islands will not be included in the 2018 List of Non-cooperative Jurisdictions.
“As premier of the Turks and Caicos Islands, I want to thank and recognise the hard work of the Ministry of Finance, Exchange of Information Unit, Attorney General Chambers, Financial Services Commission and the private sector who partnered with us to achieve this successful outcome.
“This is just the beginning and there is much more to come by way of monitoring, therefore you continued cooperation is welcome and appreciated.”
Only last month the European Union finance ministers agreed to remove neighbouring Bahamas from the EU list of tax havens.