The Organization for Economic Cooperation and Development (OECD) has recently announced that the Turks & Caicos Islands (TCI) will not be included on any OECD list of non-cooperative tax havens.

The OECD's commitment follows an agreement it reached with the TCI on the OECD's harmful tax competition initiative.

In a letter dated March 8 2002 to the secretary general of the OECD, the TCI's chief minister, Derek Taylor, committed the territory to the principles of effective exchange of information and transparency in tax matters. The chief minister emphasized that the establishment of a level playing field was essential among all the OECD member countries and non-member jurisdictions with which it competes for the provision of cross-border financial services. He said that the TCI was determined to protect its economic interests and fiscal autonomy, and developing and maintaining a level playing field is crucial to those interests.

The TCI's commitment was offered on the basis that:

  • the TCI will not be included on any OECD list of uncooperative tax havens;

  • the TCI will not be subject to any coordinated defensive measures by OECD member states;

  • those jurisdictions, including OECD member countries and other countries and jurisdictions yet to be identified, that fail either to make equivalent commitments or to satisfy the standards of the OECD's 1998 report on harmful tax competition will be the subject of coordinated defensive measures;

  • the TCI will be invited to participate fully on an equal basis in any international discussions on the design of internationally accepted standards for the implementation of commitments of this type; and

  • the TCI will receive, upon request, technical assistance as required for amending and/or implementing any laws, regulations, practices or procedures that may be necessary to comply with its commitment.

In line with all other countries and territories signing up to the OECD initiative, the TCI will agree to the effective exchange of information about criminal tax matters beginning in the first tax year after December 31 2003 and for civil tax matters beginning in the first tax year after December 31 2005. Exchange of information will not be automatic but on request, and will include protections against unauthorized disclosure and unauthorized use of information by the receiving jurisdiction. Any information will be provided subject to the relevant tax information exchange agreements with the requesting jurisdiction, on a reciprocal basis and in accordance with legal safeguards laid down in those agreements.

Information on beneficial ownership of companies, partnerships and other legal entities established in the TCI will be made available to tax and regulatory authorities in the TCI. Such information will be subject to exchange in accordance with tax information exchange agreements and to compliance with the legal procedures and safeguards laid down in those agreements.

For further information on this topic please contact Owen Foley at Misick & Stanbrook by telephone (+1 649 946 4732) or by fax (+1 649 946 4734) or by email ([email protected]).