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Jersey: no longer the tax haven that it was

March 11th, 2009 by admin | Filed under Daily News, Money Management, Saving, Savings Accounts, UK Bank Accounts, UK Banks, World Banks, savings accounts.

The beautiful island of Jersey, for so long identified as the number one tax haven for Brits, is to mark an end to decades of sheltering those who are not so keen on paying their income taxes. The U.K. government will sign a tax- information sharing agreement with Jersey tomorrow, making the island the last of Britain’s offshore tax havens to agree to a new level of transparency.

Jersey will honour their agreement to sign a tax information exchange with the UK today The agreement to exchange of information in criminal tax matters with the UK Government follows the signing of the island’s first Tax Information Exchange Agreement in 2002 (TIEA), with the US Government. Agreements have also been reached with the Netherlands in 2007, as well as the Faroe Islands, Greenland, Iceland Denmark, Finland, Norway and Sweden. The last major European to sign a TIEA with Jersey was Germany, who put pen to paper last year.

The new agreement will be signed in London by Jersey’s chief minister, Senator Terry Le Sueur, and the UK’s financial secretary to the Treasury, Stephen Timms.

Le Sueur recently confirmed d Jersey’s intentions to fully cooperate with the major economies to stamp out illegal financial transactions by stating ‘Our continuing programme of signing agreements with jurisdictions across the globe confirms our commitment to the OECD standards of tax information exchange, and demonstrates our willingness to comply with international standards of financial regulation, anti-money laundering, and combating the financing of terrorism,’

‘We are particularly pleased to have Jersey recognised by the UK as a member of the community of jurisdictions committed to international co-operation and information exchange on tax matters, and to have their assurance that Jersey will be treated as such by the UK authorities.’ He continued.

As well as the US, Jersey has already signed tax information exchange agreements with the ‘Last year the OECD secretary-general referred to the fact that Jersey has signed a number of tax information exchange agreements, and called for clear political recognition for those offshore financial centres that have made this kind of progress,’ Le Sueur says.

‘We hope to see this reflected in the outcome of the G20 summit in London on April 2 and that there will greater pressure put on those countries, including some OECD members, who have not yet shared Jersey’s commitment to transparency and co-operation.’

A TIEA is scheduled to be signed with France later this week, and in the near future with Eire. Signs that the issue is being taken seriously is the fact the discussions are also taking place between Jersey and both the Spanish and Italian governments prior to signing agreements.

Jersey says it is ready to extend such agreements to all other jurisdictions, including OECD countries. Negotiations are well under way with Australia and New Zealand to also display mutual transparency.

Prime Minister Gordon Brown has consistently stated the government view that new financial rules under negotiation by Group of 20 industrial nations need to be extended to tax havens. Countries that extend favorable tax policies for investors are estimated to be costing the U.K. Treasury at least 4 billion pounds a year in revenue.

Alistair Darling, UK Chancellor of the Exchequer recently commissioned an independent review into how the financial transparency of not only Jersey, but also the Isle of Man, Guernsey and the British Virgin Islands will be affected after signing the agreements.

The agreement will require ratification by both the UK and Jersey parliaments before it comes into force.
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