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
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.
Others are still in discussions with the OECD. Over
the coming days, some may reach agreement, others
may refuse to commit.
The OECD has not published a blacklist and it will
not blacklist anyone still in discussionsc.
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'
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
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
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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