OFFICIAL: OECD TAX PROJECT DEPENDS ON LEVEL PLAYING
Finance centres expect joint working group
to meet soon
also HARMFUL TAX PRACTICES - STOP PRESS
In a groundbreaking decision, the Organisation of
Economic Cooperation and Development (OECD) has committed
itself to working with members of the International
Trade and Investment Organisation (ITIO) and other
countries that provide international financial services
to achieve a level playing field for the exchange
of tax information.
In a joint statement with non-OECD countries, the
OECD has “agreed that the level playing field
is fundamentally about fairness” but that it
“does not yet exist” in the OECD’s
five-year-old harmful tax practices initiative.
A new Level Playing Field Joint Working Group, comprising
OECD and non-OECD states, has been asked to develop
proposals for achieving a global level playing field
and a process for taking this forward.
The ITIO and other small countries have long pointed
out that the OECD has allowed its own members like
Switzerland and Luxembourg to escape the scrutiny
to which it has subjected non-members. They have also
objected to the exclusion of finance centres like
Hong Kong and Singapore from the OECD’s project.
Now the OECD has also agreed that “ways should
be explored to involve significant financial centres
that are not currently participating in the Global
“Without a level playing field, small countries
fear that OECD members like Switzerland will simply
win business at our expense”, explained ITIO
Chair Deborah Drummond, “We are pleased the
OECD has acknowledged the fundamental unfairness of
its tax project”.
Ms Drummond continued: “ITIO members are
looking forward to working closely with the OECD to
achieve a level playing field. We expect the joint
working group to be up and running as soon as possible.”
The OECD and small states reached agreement at a meeting
of the OECD’s Global Forum on Taxation in Ottawa
on 14-15 October. At the meeting, the ITIO tabled
a paper, “Levelling
the Playing Field”.
- ENDS -
NOTES TO EDITORS
1. The OECD Global Forum on Taxation,
a meeting of the OECD and other finance centres, including
ITIO members, took place on 14-15 October in Ottawa,
2. The participating non-OECD jurisdictions were those
who had committed to the OECD’s principles of
transparency and exchange of information on a level
playing field basis.
3. Before the Forum, the OECD’s attempt to get
countries across the world to exchange tax information
had looked doomed to failure. Last year, numerous
small finance centres committed to work with the OECD
on the clear understanding that a level playing field
would be put in place. This was always going to be
problematic, given that key OECD members (Switzerland,
Luxembourg, Belgium and Portugal) had opted out of
the project, while non-OECD centres such as Hong Kong
and Singapore were never targeted.
4. In June 2003, the EU savings tax directive undermined
the level playing field further by excusing Switzerland,
Luxembourg, Austria and Belgium from complying with
OECD standards and timelines and by permitting Switzerland
to set its own timetable for moving forward.
5. Now, however, OECD countries have agreed to work
with ITIO countries and other small states to develop
an objective process for introducing the same information
exchange rules on the same timetable, with the same
sanctions for non-compliance.
6. The Level Playing Field Joint Working Group
is comprised of five OECD and five non-OECD countries.
ITIO members comprise the bulk of the non-OECD members,
who will alternate as necessary, and who are Cayman
Islands/St Kitts and Nevis, Isle of Man/Jersey, Panama/Bahamas,
Cook Islands/Samoa and Seychelles/Mauritius.
7. The level playing field principles
are: universal participation in setting new rules;
uniform standards applied on a uniform implementation
timetable; and same sanctions for non-co-operation
8. The International Trade and Investment
Organisation (ITIO) works for a level playing
field in the trade in services. It includes Anguilla,
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.
9. At the ITIO’s AGM in Ottawa on 12-13 October,
Cayman Islands (previously Deputy Chair) assumed the
Chair in rotation from the British Virgin Islands.
10. For more information, please contact Ben
Coleman on +44 (0) 20 8743 7640 or +44 (0) 7958 616
Return to News Releases