Last month in Ottawa, the Organisation for Economic Co-operation and Development (OECD) and a group of international finance centres agreed to work on achieving a global level playing field and, on this basis, to continue their dialogue on tax information exchange. Most of the non-OECD centres participating in the Global Forum made it clear they remained committed to dialogue despite the OECD’s admission that a level playing field does not currently exist and that its absence is unfair.
Leading industry body, the Society of Trust and Estate Practitioners, welcomed the outcome and has called on the OECD to end tax blacklists and improve market access for all finance centres. Richard Hay, Co-Chairman of STEP’s International Committee commented, * “We are pleased that OECD and non-OECD finance centres will now work together to secure a level playing field for regulation of financial services. The OECD is to be commended for recognising the crucial importance of a level playing field amongst all financial centres. The OECD must now consider eliminating tax blacklists and work to secure open access to markets by all finance centres.”*
STEP is concerned that tax blacklists by OECD member states, which discriminate against offshore non-OECD finance centres, are becoming increasingly common, although “offshore” centres within the OECD escape such discrimination. For example, a new law introduced by the Portuguese Government discriminates against traditional offshore companies but explicitly gives exemptions to those in booming OECD “offshore” centres like Delaware.
In Ottawa, OECD participants agreed that a sub-group would work over coming months on developing proposals for achieving a global level playing field. The Commonwealth Secretariat has been given a key role and will host the first meeting of the new level playing field working group.
The Global Forum is due to meet again in April 2004. The international finance centres invited to the Global Tax Forum are those who have committed to the OECD’s principles of transparency and exchange of information (on a level playing field basis). These level playing field principles are: universal participation in setting new rules; same implementation timetable; and same sanctions for non-co-operation.
The Society of Trust and Estate Practitioners (STEP) is the professional body for the trust and estate profession worldwide. STEP members come from the legal, accountancy, corporate trust, banking, insurance and related professions, and are involved at all levels in planning, creating, managing and accounting for trusts and estates, executorship, administration and related taxes. STEP has over 10,000 members in leading finance centres in OECD and non-OECD countries alike.
Within the Caribbean, Central and Southern America region, STEP has nine branches, including STEP Bahamas.