Guernsey and Jersey reach agreement with OECD on harmful tax practices initiative

Guernsey and Jersey today announced that an agreement had been reached with the OECD with regard to its harmful tax practices initiative. Following clear recognition from the OECD of the essential importance of a level playing field, Guernsey and Jersey have agreed to reflect the OECD’s principles of exchange of information and transparency both in a general political commitment and in tax information exchange agreements to be negotiated with individual jurisdictions.

Guernsey and Jersey have consistently adopted the highest standards of financial regulation and have long been recognised as cooperative jurisdictions by respected international bodies, including the Financial Action Taskforce and the Financial Stability Forum. The Islands’ decision to engage with the OECD harmful tax practices initiative is further proof of their willingness to participate in the development of international standards of best practice in terms of information exchange and transparency. As is made clear in the Islands’ letter to the OECD, Guernsey and Jersey already have existing legislation and have engaged in information exchange in line with the OECD’s proposals for exchange of information on criminal tax matters. This places the Islands well in advance of many jurisdictions including some OECD members.

The Islands’ commitment to the OECD process is based on the essential need for a level playing field among all OECD member countries and also those non-member jurisdictions with which they are materially in competition in the provision of cross border financial services. The Islands note that OECD member countries such as Switzerland and Luxembourg have abstained from endorsing the harmful tax practices process. Both Islands therefore look forward to the OECD building further international support for its work in order to secure long term success for the important twin objectives of global standards in exchange of information and transparency.

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