CONCESSIONS THREATEN OECD TAX TIMETABLE
Organisation for Economic Cooperation and Development’s
tax project is under threat from the European Union’s
savings tax directive, which has undermined the principle
and timetable for tax information exchange.
OECD has pressed finance centres across the world,
including members of the International Trade and Investment
Organisation (ITIO), to move towards tax information
exchange by 31 December 2005, and has assured them
that any changes would be made on the basis of
a level playing field.
by permitting some of its own members (who are also
OECD members) to avoid tax information exchange until
2010 at the earliest, the EU has thrown matters into
Tuesday 14 October, ITIO member countries will meet
the OECD at a “Global Forum” in Ottawa
to seek a way through the impasse.
the savings tax directive, EU countries have abandoned
the level playing field proposed by the OECD by excusing
fellow OECD members Switzerland, Austria, Luxembourg
and Belgium from compliance with the OECD’s
exchange of information standards and timelines and
by permitting Switzerland to set its own timetable
for moving forward.
progress will be difficult because the EU has accepted
that a unanimous vote of all 15 EU members and the
agreement of Switzerland and four other countries
will be required before information exchange based
on the OECD standard is introduced.
Forbes, chairman of the ITIO, said: “ITIO
member countries have acted in good faith. The OECD
has praised our cooperation but is sadly unable to
deliver its own key members.
countries have now been given an alternative to the
OECD’s information exchange approach. The Global
Forum will need to consider whether to take the OECD’s
road or the EU’s or an alternative approach.
For the ITIO, any way forward must be on a level playing
Hay, co-chairman of the Society of Trust
and Estate Practitioner’s international committee,
commented: “The EU has undermined the OECD’s
harmful tax project. International finance centres
have confirmed their willingness to support the principles
of transparency and exchange of tax information on
a level playing field basis. But EU finance ministers
have handed Switzerland an effective veto on further
the OECD’s European Union members and Switzerland
meet the OECD’s information exchange standard?”
this year, Donald Johnston, the OECD’s secretary-general,
warned privately in a letter to EU finance ministers
that by exempting some countries from the exchange
of information on tax matters, the EU would damage
the OECD’s worldwide drive against harmful tax
importance of the level playing field is highlighted
in the second edition of a major report issued today
by the International Trade and Investment Organisation
(ITIO) and Society of Trust and Estate Practitioners
A Level Playing Field,
a study conducted by law firm Stikeman Elliott for
the ITIO and STEP, reveals that offshore finance centres
regulate to a higher standard than OECD members in
key areas, and argues for international acceptance
of a level playing field.
The OECD Global Tax Forum, a meeting
of the OECD and other finance centres, including ITIO
members, takes place on 14-15 October
in Ottawa, Canada.
The EU’s timetable for exchange of information
is at odds with the OECD’s. The OECD wants non-OECD
finance centres to meet a deadline of 31 December
2005. However the EU savings tax directive agreed
in June 2003 permits all EU members to delay exchanging
information until Switzerland and four others agree
to do so. No deadline is given.
The international finance centres invited to the Global
Tax Forum are those who have committed to the OECD’s
principles of transparency and exchange of information
(on a level playing field basis).
The level playing field principles
are: universal participation in setting new rules;
same implementation timetable; and same sanctions
STEP and the ITIO commissioned Stikeman Elliott to
produce the report.
The International Trade
and Investment Organisation (ITIO)
works for a level playing field in the trade in services.
It comprises 17 small and developing economies: Anguilla,
Antigua & Barbuda, Bahamas, Barbados, Belize,
British Virgin Islands, Cayman Islands, Cook Islands,
Isle of Man, Labuan (Malaysia), Panama, St Kitts &
Nevis, Samoa, St Lucia, St Vincent & the Grenadines,
Turks & Caicos and Vanuatu. The Commonwealth Secretariat,
CARICOM, Pacific Islands Forum, Caribbean Development
Bank and Eastern Caribbean Central Bank have Observer
status. See www.itio.org.
The Society of Trust and Estate Practitioners (STEP)
is the professional body for the trust and estate
profession worldwide. STEP members come from the legal,
accountancy, corporate trust, banking, insurance and
related professions, and are involved at all levels
in planning, creating, managing and accounting for
trusts and estates, executorship, administration and
related taxes. STEP has over 10,000 members in leading
finance centres in OECD and non-OECD countries alike.
Stikeman Elliott is a Canadian law firm
with offices in North America, Asia, Australia and
Europe. It has a broad corporate and commercial law
practice, including private sector and government
consultancy on international taxation, banking and
For more information, please contact:
Ben Coleman +44 (0) 7958 616 444.
Richard Hay +44 (0) 20 7367 0150 or
Keith Johnston + 44 (0) 20 7763 7156.
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