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Towards a Level Playing Field,
second edition.


Report undertaken by Stikeman Elliott on behalf of the ITIO and STEP.

 


5 March 2002

THE OECD'S HARMFUL TAX COMPETITION INITIATIVE:
SIX FACTS TO BEAR IN MIND

1. A week after the February 28 deadline set by the Organisation for Economic Cooperation and Development (OECD) for its harmful tax competition initiative, five more states have signed off on agreements with the OECDa.

2. Of the remaining 23, one nation has indicated that it will not make a commitment, citing the lack of a level playing field among its concernsb.

3. Others are still in discussions with the OECD. Over the coming days, some may reach agreement, others may refuse to commit.

4. The OECD has not published a blacklist and it will not blacklist anyone still in discussionsc.

5. A major cause for concern remains the issue of a level playing field. The OECD wants small and developing economies to make changes before its own "offshore" centres of Switzerland and Luxembourg, who have abstained from the process. Small states want all countries to move in step, fearing that business will otherwise migrate to the "last man standing", which would enrich the OECD club at the small countries' expenses.

6. The OECD cannot impose sanctions: only its member states can. It would appear that the USA and Canada are loath to do so. New Zealand has stated it would not do so. Australia stated only last Friday that it preferred a cooperative, consultative approach.

a Antigua & Barbuda, Grenada, Guernsey, Jersey, St Vincent & the Grenadines
b Vanuatu
c The BVI has received a letter from the OECD to this effect. A report by BBC Online on 27 February 2002 also stated, "The deadline is flexible, however. Accepting late arrivals would show 'a great deal of human charity,' said the OECD spokesman, 'and the OECD has always been famed for its human charity.'"

For further information, please contact Ben Coleman on
Tel. +44 (0) 20 8743 7640 or +44 (0) 7958 616 444.

The International Tax and Investment Organisation (ITIO) is a grouping of small and developing economies (SDEs) set up in March 2001 to help SDEs respond to global tax and investment challenges. It explicitly considers the development implications of these challenges.


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ITIO THANKS COMMONWEALTH SECRETARY-GENERAL

The ITIO has thanked Commonwealth Secretary-General McKinnon for his stance following the publication of an OECD report, 'Tax Co-operation: Towards  a Level Playing Field'...



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