Friday, 3 April 2009

Whitelist, Greylist, Blacklist and Nolist

Just finished skimming the OECD release on tax havens. It is interesting that the "White List" does not take account of any differences between tax havens and other jurisdictions. If they have implemented the tax standard, that is what matters. I think that as more standards come into play in the future (and I am sure the OECD will review what other standard instruments can be used), the distinction between "tax havens" and "countries" or "offshore" and "onshore" will gradually cease to be the main important distinguishing features, and how well countries have implemented standards (and how well they operate them) will become the new means of differentiation. 

The "Grey list" still has a distinction between "tax havens" and "other financial centres", showing how that still can be seen to apply here - there are relatively few "other financial centres", and they have already made moves towards the "white list". Again "tax haven" is probably the better term, because places like Liberia, the Neverlands, or Liechtenstein are not exactly "offshore".

The "Black list" is quite surprising, because it is not "offshore" at all, but three fairly large countries. I must confess I was surprised!

China does not feature, because it is not a member of the OECD, although it is part of G20, and because it is such a big player now in world economics, don't expect to see Hong Kong and Macau appear. According to Paul Mason of Newsnight, "On Wednesday night there were frosty negotiations between France and China over the inclusion of Macau, which got mixed up with France deciding to moderate its criticism of the People's Republic of China over the issue of Tibet.". He quotes a Guardian report that:

"[Hu and Sarko] finally agreed to meet at Sarkozy's hotel, the Mandarin, a helpfully named venue. But the Chinese refused to turn up until the Elysée issued a joint diplomatic communique in which France moderated its position on Tibet. The meeting finally went ahead just after 10.30pm. The air cleared - the two men discussed whether Macau should be blacklisted or given more time. But it took an intervention from Barack Obama to help seal the deal on tax havens as the French and the Chinese haggled until the last five minutes of the summit. "Let's get this all in some kind of perspective guys," Obama said at one point."

The full Guardian report is in the link below, and it is well worth reading for the comedy of errors that played out with France and China. The end result was that Macau simply disappeared off the radar onto a "no list", or to be more precise a vague little footnote which doesn't mention them by name!

"White list"
Jurisdictions that have substantially implemented the internationally agreed tax standard

Argentina Australia Barbados Canada China2 Cyprus Czech Republic Denmark Finland France Germany Greece Guernsey Hungary Iceland Ireland Isle of Man Italy Japan Jersey Korea Malta Mauritius Mexico Netherlands New Zealand Norway Poland Portugal Russian Federation Seychelles Slovak Republic South Africa Spain Sweden Turkey United Arab Emirates United Kingdom United States US Virgin Islands

"Grey List"
Jurisdictions that have committed to the internationally agreed tax standard, but have not yet substantially implemented

Tax Havens

Andorra Anguilla Antigua and Barbuda Aruba Bahamas Bahrain Belize Bermuda British Virgin Islands Cayman Islands Cook Islands Dominica Gibraltar Grenada Liberia Liechtenstein Marshall Islands Monaco Montserrat Nauru Netherlands Antilles Niue Panama St Kitts and Nevis St Lucia St Vincent & Grenadines Samoa San Marino Turks and Caicos Islands Vanuatu

Other Financial Centres

Austria  Belgium  Brunei Chile Guatemala Luxembourg Singapore Switzerland

"Black List"

Jurisdictions that have not committed to the internationally agreed tax standard

Costa Rica, Malaysia (Labuan), Philippines, Uruguay

The Cayman Islands has enacted legislation that allows it to exchange information unilaterally and has identified 11 countries with which it is prepared to do so. This legislation is being reviewed by the OECD.

Austria, Belgium, Luxembourg and Switzerland withdrew their reservations to Article 26 of the OECD Model Tax Convention. Belgium has already written to 48 countries to propose the conclusion of protocols to update Article 26 of their existing treaties. Austria, Luxembourg and Switzerland announced that they have started to write to their treaty partners to indicate that they are now willing to enter into renegotiations of their treaties to include the new Article 26.



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