Island exonerated

French President Nicolas Sarkozy speaks during a media conference at a G20 summit in Cannes, France on Friday, Nov. 4, 2011. Leaders from within troubled Europe and far beyond are working Friday on ways the International Monetary Fund could do more to calm Europe's debt crisis. (AP Photo/Remy de la Mauviniere)

French President Nicolas Sarkozy speaks during a media conference at a G20 summit in Cannes, France on Friday, Nov. 4, 2011. Leaders from within troubled Europe and far beyond are working Friday on ways the International Monetary Fund could do more to calm Europe's debt crisis. (AP Photo/Remy de la Mauviniere)

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IT’S official, it seems – we are not a tax haven.

The confirmation has come from no less a person than President Nicolas Sarkozy, a long term critic of the offshores.

In a report delivered to the G20 summit in Cannes, the Isle of Man was named as one of only eight jurisdictions in the world hailed for the highest standards in tax transparency.

And now, based on that same Global Forums report, French President Sarkozy has named the 11 countries that are considered by the world’s leading economies as ‘tax havens’.

Sarkozy says the report to the G20 identifies Antigua, Barbados, Botswana, Brunei, Panama, the Seychelles, Trinidad and Tobago, Uruguay and Vanuatu as lacking legal systems that allow exchange of information for tax purposes.

The forum report names two more, Liechtenstein and Switzerland, which are judged to have adequately implemented information exchange mechanisms that they have recently adopted.

Chief Minister Allan Bell MHK said: ‘France has been a long term critic of the offshores and showed an inability to understand the constitutional relationship of the Crown Dependencies with the UK.

‘Along with Germany, France has been the most consistent in trying to raise issues of tax havens and to seek international commitment to close them down.

‘As a very interesting side issue with the generally unsuccessful G20 meeting in Cannes, not only has the Isle of Man been identified in the top bracket of financial centres for its openness and co-operation on tax, but we have now been exonerated by Sarkozy, a leading critic of tax havens.’

It had been feared that the G20 could have seen a fresh threat posed to the Isle of Man from Europe.

Ahead of the summit, the European Council announced it wanted real progress in Cannes on ‘combating the existence of tax havens’.

This agenda item is shown completely separate from another that seeks progress on ‘identifying and publicly listing non-cooperative jurisdictions’.

But for the first time, we now know exactly which jurisdictions are in the firing line as tax havens.

There was more good news from the G20, with another report published on the eve of the summit placing the island in a ‘white list’ for the high standards of its tax co-operation and information exchange.

The Organisation for Economic Co-operation and Development’s Tax Transparency report places the Isle of Man alongside Australia, France, India, Ireland, Italy, Japan and Norway as jurisdictions found to have all elements of effective information exchange in place.

And in a review of around 60 jurisdictions conducted by the Financial Stability Board, the island was placed in the top flight of countries demonstrating sufficiently strong adherence to the international standards of tax co-operation and information exchange.

The Isle of Man has signed some 25 Tax Information Exchange Agreements with countries around the world.

And it was one of the first jurisdictions to introduce automatic tax information exchange, which came in force from July this year.

Whether all this will be sufficient to appease tax haven critics like the Tax Justice Network remains to be seen.

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