TAX NEWS - June 2010
Turks & Caicos Islands Tax: Governor signs anti-secrecy agreement with Germany
The anti-secrecy agreement with Germany sees the Turks & Caicos Islands distance itself even further from the international 'grey list' of states which fail to comply with tax transparency standards.
Signatures have now been put to official pacts with six Nordic Alliance countries - Norway, the Faroe Islands, Finland, Greenland, Iceland and Sweden - as well as New Zealand, the UK, Ireland, Netherlands, Denmark, Australia and France.
Just twelve TIEAs are needed to join the Organisation for Economic Corporation and Development's (OECD) safe 'white list'.
German ambassador to Kingston, Jurgen Engel, made a flying visit to the Turks & Caicos Islands on Thursday, June 3, to sign the tax treaty.
The recent agreement will help disclose assets that have not been reported in home countries and also enable tax authorities to access information about people seeking to evade payment of tax.
Turks & Caicos Islands entered into a formal written commitment to the OECD's principles of transparency and exchange of information on March 8, 2002.
However the Turks & Caicos Islands and Germany wished to enhance and facilitate the terms and conditions governing the exchange of information relating to taxes.
On Friday, June 5, Mr Engel jetted off to Grand Turk to attend the official signing ceremony.
As well as signing the agreement Mr Engel also took advantage of his visit to the Turks & Caicos Islands by meeting with a small group of German nationals at their consulate in Grace Bay.
The ambassador was then given an extensive tour of Providenciales by German honorary consul Titus de Boer.
Mr de Boer said: "I think this visit and the signing of this agreement is yet another significant mile stone in the relationship between the Turks & Caicos Islands and Germany.
"The fact the Turks & Caicos Islands is now partnered with the worlds fourth largest economy, gives it added credibility on the world stage, especially vis-a-vis the OECD.
"Signing a tax agreement with the likes of San Marino is one thing, but coming to an agreement with a world power like Germany is indeed momentous."
To enable the pacts to take effect, new legislation in the form of the Tax Information Exchange Bill 2009 was penned late last year.
Governor Gordon Wetherell previously described the bill to the Weekly News as a "major step forward" for the country.
"Tax sharing agreements are very important for transparency and making sure that one jurisdiction is not hiding tax evasion by a resident in another jurisdiction.
"These standards are international and all jurisdictions that want to be involved in the financial services sector need to comply with them."
He added however that the territory could not afford to become complacent after being removed from the grey list.
"It's important that the bar continues to rise. Once we have agreements signed we need to show a good record of implementing them."
In April 2009, former British Prime Minister Gordon Brown sent letters to all Crown territories ordering them to sign up to TIEAs or face punitive action.
The move followed the G20 summit in London when world leaders pledged to crack down on tax abuse and shadow banking through offshore jurisdictions.