Jersey faces sanctions over tax compliance
The crown dependency of Jersey is facing the threat of sanctions if it does not act to bring its financial systems in line with guidelines set out by Organisation of Economic Development and Cooperation.
The Channel Island is set to have ‘one or two problems’ with the OECD’s efforts to force called tax havens adopt more transparent and accountable financial systems. It also accused the OECD of opening up areas of debate that had already been resolved.
But official pressure is now being put on Jersey by to Treasury to comply after Gordon Brown publicly campaigned for greater global financial transparency, according to the FT.
Measures imposed could include a tightening of rules relating to overseas countries locating their operations in Jersey for tax purposes – the lifeblood of many island-type economies.
Last year the OECD named and shamed 47 of what it called ‘potential tax regimes’ in OECD member countries. It also described 35 jurisdictions as ‘tax havens’.
Jersey, along with the Channel Islands and the British territories of Gibraltar, Montserrat, the British Virgin Islands, the Turks and Caicos Islands and Anguilla are all on the list and face the threat of having favourable tax treaties scrapped and other harsh penalties unless they agree to OECD reforms.
A number of previously uncooperative territories have recently agreed to OECD reforms and will not be included on the blacklist, the most recent of these being the West Indian island of Barbados. Others include Tonga and the Isle of Man.
