St. Kitts-Nevis and Montserrat ‘largely compliant’
PARIS, CMC – The Paris-based Organization for Economic Cooperation and Development (OECD) has rated St. Lucia, Antigua and Barbuda, and Anguilla as “partially compliant” with international standards on tax transparency.
But it noted that St. Kitts-Nevis and the British Overseas Territory of Montserrat were “largely compliant”.
In reviewing the exchange of information practices through Phase 2 peer review reports in 10 jurisdictions, the OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes said it allocated ratings for compliance with the individual elements of the international standard, as well as an overall rating.
It said five jurisdictions – Andora, Anguilla, Antigua and Barbuda, indonesia and St. Lucia – received an overall rating of “partially compliant”.
The Global Forum also said that four others – Chile, the former Yugoslav Republic of Macedonia, Montserrat and St. Kitts-Nevis – received an overall rating of “largely compliant”, while Mexico was rated as “compliant” with Global Forum standards.
While there are legal obligations for most entities to maintain ownership information, the report notes that compliance with ownership obligations was “not sufficiently monitored” by the St. Lucian authorities over the review period.
“There are insufficient accounting requirements for all entities and, as a result, accounting information was unable to be provided in all cases where it was requested.
“Further, due to a domestic tax interest in its access powers over the review period, St. Lucia was unable to access all requested information,” the report said, noting however that St. Lucia enacted the International Tax Cooperation Act in August 2012, “which clarifies its powers to access information in all cases”.
It said Castries has a “wide treaty network” covering all relevant treaty partners and has recently put in place organizational processes and resources “to ensure that exchange of information (EOI) requests are responded in an adequate and timely manner”.
The report urges St. Lucia authorities to report steps taken to address the recommendations made in the Phase 2 report within six months.
On Antigua and Barbuda, the report says the legal framework “ensures availability of most information but a gap was identified in the obligations pertaining to the availability of accounting information on international business companies and certain ordinary trusts.
“During the review period, the Antigua and Barbuda’s authorities did not have a system of oversight to ensure the fulfillment of the obligations to maintain ownership and accounting information; and, correspondingly, penalties for non-compliance were rarely imposed by the authorities>”
The OECD report added that “there was also some difficulty experienced” in answering EOI requests in a timely manner.
But it said Antigua and Barbuda’s authorities have since set up a formal unit within the Inland Revenue Department to monitor and process incoming requests and that the island should report steps taken to address the recommendations made in the Phase 2 report within six months.
The report says Anguilla is now a party to the Multilateral Convention on Mutual Administrative Assistance and “can effectively exchange information with all its treaty partners”.
During the review period, the report says Anguilla also “experienced some difficulties” in answering EOI requests in a timely manner, but with the recent legal amendments, Anguilla should be better placed to answer its EOI requests.
The report recommends that Anguilla monitor its new laws to ensure that it exchanges all types of information in line with the international standard.
It says Anguilla should report steps taken to address the recommendations made in the Phase 2 report within 12 months.
The report also notes that Montserrat is now a party to the Multilateral Convention on Mutual Administrative Assistance and, therefore, will be able to “effectively exchange information under this instrument once it has completed the amendments to its domestic law”.
During the review period, the report stated that Montserrat received only one request, “which it answered in a timely manner” and that the island has made some legal amendments to “bridge the gaps pointed out in its Phase 1 report”.
The report recommends that Montserrat monitor its new laws to “ensure that it exchanges all types of information in line with the international standard” and urges the authorities to report steps taken to address the recommendations made in the Phase 2 report within 12 months.
The report says that, to a large extent St. Kitts and Nevis’ legal framework and its practical implementation ensure that ownership, accounting and bank information is available according to the standard.?
However, the report notes that compliance with ownership and accounting record keeping obligations on entities exempt from taxation was “not sufficiently monitored by the Financial Services Regulatory Commission to ensure the availability of such information in all cases”.
The report says while St. Kitts and Nevis has limited experience in exchange of information, it has, nonetheless, put in place “organizational processes and committed resources for handling exchange of information requests”.
It also recommends that St. Kitts and Nevis report steps taken to address the recommendations made in the Phase 2 report within12 months.
The OECD said some jurisdictions continue requesting supplementary reviews that assess steps taken to address gaps in their legal frameworks and EOI practices identified in previous reviews.
With the release of the latest batch of reviews, the OECD said the Global Forum has now completed 143 peer reviews and assigned compliance ratings to 64 jurisdictions that have undergone Phase 2 reviews and that additional peer reviews will be completed by the next plenary meeting of the Global Forum, in Germany in late October.
