Guernsey signs ‘FATCA’ agreement with the UK
Guernsey has signed an agreement with the UK on a package of tax measures designed to enhance the automatic tax information exchange provisions already in place between the two jurisdictions.
The island’s Chief Minister, Peter Harwood (pictured), signed the Inter-Governmental Agreement (IGA) in London alongside the UK’s Exchequer Secretary to the Treasury, David Gauke.
The current measures have been in existence since 2005, with automatic exchange of information the only option since 2011.
The IGA is similar to the Model I type agreement being negotiated with the US relating to the Foreign Account Tax Compliance Act (FATCA), which is expected to be signed shortly.
Fiona Le Poidevin, chief executive of Guernsey Finance – the promotional agency for the island’s finance industry, says: “I am very pleased that Guernsey has signed this agreement with the UK. It enhances the provisions regarding automatic exchange of information which have already been in place since 2011 and, once again, demonstrates our determination to tackle tax evasion.
“The OECD has continually reaffirmed that Guernsey adopts international standards of tax transparency and exchange of information. This agreement further reinforces our status as a leader in making strides to combat tax evasion and we look forward to building on this even further by signing a similar Model I agreement with the US, in relation to FATCA, in the near future.”
Guernsey’s IGA with the UK was signed at the same time as Jersey’s Chief Minister, Ian Gorst, signed an equivalent agreement between Jersey and the UK and closely follows from the other British Crown Dependency, the Isle of Man, signing similar terms with the UK.
Harwood says: “These measures are in line with the provisions of the agreement being negotiated with the US regarding FATCA, which we will be signing shortly. The two agreements with the UK and the US have been supported by our industry as being key to a sustainable future for the finance sector and securing our global reputation for tax transparency.
“When I announced this proposed agreement earlier this year, I emphasised that it was further illustration of Guernsey’s commitment to combating tax evasion and the principle of automatic exchange. Our twin IGA approach to UK and US reporting will provide our industry with a very strong platform to compete on the world stage against weaker, less transparent jurisdictions.”
Guernsey’s IGA with the UK will be subject to approval from the States of Guernsey, the Guernsey parliament, at its December meeting. The Chief Minister will present a report which will also include the recommendation to formally request the UK to extend the OECD Multilateral Convention on Mutual Administrative Assistance in Tax Matters to Guernsey. The Guernsey parliament will also be asked to confirm Guernsey’s support for the compilation of an OECD model for automatic exchange of information and its support for the OECD model to be rapidly adopted as the global standard for automatic exchange of information.
The UK IGA will be published shortly and will contain details of the alternative reporting regime for UK resident non-domiciled individuals. Guidance notes will be published shortly after the US IGA is signed, as it is intended for there to be common guidance, as far as possible, for the UK and US IGAs. These notes are being developed jointly between the governments of Guernsey and Jersey.
Guernsey’s Chief Minister also signed Tax Information Exchange Agreements (TIEAs) with Slovakia and Gibraltar. This also follows from a recent signing of two ‘partial’ Double Taxation Arrangements (DTAs) – one for individuals and another for shipping and aircraft – with Poland. This means that Guernsey has now signed 48 TIEAs and 21 DTAs, including eight ‘full’ DTAs and 13 ‘partial’ DTAs.
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