Cyprus fails tax transparency rules, OECD says
Cyprus, Luxembourg, the British Virgin Islands and the Seychelles do not meet international standards on tax transparency, a global tax forum said on Friday, as international pressure grows on countries seen as tax havens.
The four failed to share taxpayer information with other countries effectively or to gather information on beneficial ownership of corporate entities registered on their territory, said the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Overseen by think thank the Organisation for Economic Co-operation and Development (OECD), the forum said the jurisdictions were the only ones of 50 it examined which were non-compliant with internationally agreed best practice.
The Group of 20 leading economies, which has asked the OECD to lead efforts on curbing international tax evasion and avoidance, has said it wants to put pressure on to «non-cooperative jurisdictions».
Luxembourg, which EU sources said is under investigation by the European Commission for tax deals it has cut with major multinationals, said it considered the rating to be «excessively harsh».
It said in a statement that a «very limited number» of its responses to requests for information had been considered to be unsatisfactory.
The Financial Secretary of the British Virgin Islands, Neil Smith, said the rating did not accurately reflect the current practices in the BVI since 2012.
“Unfortunately this classification misses the mark. It does not give an accurate reflection of the standards of tax information sharing found in the BVI.”
Cyprus and the Seychelles government representatives either declined to comment or were not available for comment.
Earlier this year, German politicians demanded improved transparency in Cyprus’s banking sector, long seen as having weak controls against money laundering, as a condition for providing bail out funds.
The OECD stopped short of adding the countries to its list of tax havens but a country’s omission from that list has in the past largely been contingent on a willingness to share tax information.
Currently, only two small Pacific islands are on the list but other countries including Ireland are regularly accused by politicians in larger countries like the U.S. of being tax havens. [Reuters]