Guernsey’s Chief Minister Peter Harwood has announced the island’s intention to finalise a draft agreement on a proposed tax package with the UK.
It will reinforce Guernsey’s commitment to tax transparency and its status as a mainstream international finance centre.
The proposed package comprises: agreement in principle to enhanced reporting of tax information along Foreign Account Tax Compliant Act (FATCA) principles through an Intergovernmental Agreement (IGA) with the UK, including alternative reporting arrangements for non-domiciled UK tax residents (non-doms); agreement to negotiate a revised Double Taxation Agreement; and agreement on a disclosure facility.
The announcement comes as Guernsey also moves towards concluding an agreement with the US on FATCA.
Both IGAs are subject to the proper decision making process of the Guernsey parliament, the States of Guernsey, and thus will be presented to the House for approval later this year.
The proposed package of measures will further reinforce Guernsey’s position as a tax transparent, co-operative jurisdiction and will best position Guernsey’s finance sector for long term growth opportunities.
Harwood (pictured) says: “Guernsey is fully committed to combating tax evasion and the principle of automatic exchange and our twin IGA approach to US/UK reporting will provide our industry with a very strong platform to compete on the world stage against weaker, less transparent and compliant jurisdictions.
“The agreement that we are working towards with the UK will be consistent with our belief that Guernsey’s long-term sustainable economic future is best served by safeguarding our position and reputation as a respected, well regulated, tax transparent jurisdiction. With such a UK agreement, automatic exchange under the EU Savings Directive and importantly an IGA arrangement with the US for FATCA now almost concluded, we believe Guernsey business will have both certainty and a competitive advantage.”
Fiona Le Poidevin, chief executive of Guernsey Finance – the promotional agency for the island’s finance industry, says: “Guernsey’s statement of intent to finalise agreement on a tax package with the UK is another clear demonstration of the Island’s position as a well regulated and compliant international finance centre and of our strong relationship, as a Crown Dependency, with the UK.
“The news will provide certainty to our client base and reinforce the message that we are committed to tax transparency and to being a cooperative global partner. The direction shown by our government in this regard is a clear indicator of our position as a leading international finance centre both now and well into the future.
“I’m also pleased that we are close to reaching an agreement with the US on FATCA and can move forward positively to concluding both IGAs in the near future.”
The final details of the enhanced reporting agreement and the alternative non-dom reporting arrangements will be published in due course and will be subject to consultation with local industry on implementation issues. It is presently intended to publish both the US IGA and the UK IGA concurrently to provide for a streamlined consultation and implementation process.
