Sunday, November 25, 2007

Offshore banks according to Forbes

According to a recent article in Forbes, The Organisation for Economic Co-operation and Development (OECD) is less than happy with a number of the most highly regarded offshore centres and the efforts that they have undertaken to improve transparency and remove the possibility of criminal taxation evasion activity happening within their borders.
The OECD update on offshore tax havens targeted specifically Austria, Luxembourg, Switzerland and Singapore claiming that these popular, well regulated, private and secure jurisdictions have been less than fully cooperative with recent amendments to international standards for information sharing.

Interestingly enough, Singapore is the jurisdiction that has been favoured by many seeking to remove assets from the European Union and the other nations that signed up to the EU Savings Tax Directive. Having not agreed to the terms of the directive, Singapore has benefited substantially from an inward flow of international assets and funds and has gained ground in terms of its popularity as an offshore tax haven of note.

Naturally enough the jurisdiction is more than keen to maintain its newly found status and is therefore seemingly attempting to tread the incredibly fine line between cooperation and maintaining a competitive edge – but Singapore must tread carefully, the influence and far reaching authority of the Organisation for Economic Co-operation and Development should never be underestimated.

The other offshore centres mentioned specifically by the OECD in its tax haven update - namely Austria, Switzerland and Luxembourg - have all signed up to the terms of the EU Savings Tax Directive and yet still they have been heavily criticised for not doing enough to counter tax evasion.

In a damning comment aimed right at Austria, Luxembourg and Switzerland the OECD update on offshore tax havens reads ‘a number of offshore financial centres that are committed to implement standards on transparency and the effective exchange of information standards developed by the OECD’s global forum on taxation have failed to do so.’

The chairman of the organisation’s fiscal affairs division did not go so far as to outwardly threaten the jurisdictions, but it is apparent that they have not done enough to implement the standards for transparency and exchange of information that were developed by the Global Forum back in 2000. It’s likely that the offshore centres named will have significant pressure exacted upon them in coming months and it will be very interesting to see how they work to tread the fine line between giving sufficient access to bank information for tax purposes and remaining attractive in order to win and retain offshore business.

Best regards
Jarl Moe
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