CI agrees deal with Dutch
(CNS): The Cayman Islands government said today that it had finalized the details of another Tax Information Exchange Agreement, this time with the Netherlands. A technical team from the European state was in Cayman this week to agree the terms and protocol for the exchange of information. The proposed agreement was drafted during two days of meetings in George Town on Wednesday and Thursday, 24 and 25 June, and the text has been initialled by both parties.
According to a press release from the Cayman Islands Monetary Authority, the draft agreement covers many of the standard provisions in the Organisation for Economic Cooperation and Development (OECD) model agreement for the exchange of information on tax matters but details of the content were not disclosed.
The negotiations with the Dutch technical team had started under the previous administration and former minister Alden McLaughlin told CNS that talks with the Netherlands had progressed well before the election and he hoped the current team had been briefed with regard to the details which had already been negotiated.
He explained that Deputy Financial Secretary Deborah Drummond had been a key member of the negotiating team along with Chris Rose, and they were the ones that had established the technical grounds on which the two countries could enter into an agreement. However, neither of the former financial experts and were named as being present during this week’s meetings.
Now that the technical teams have initialled the documents, the agreement will be submitted for formal approval by teh cabinet and parliament of both jurisdictions. Attorney General Samuel Bulgin led the Cayman Islands delegation, while Rob van Kuik, International Tax Counsellor for the Netherlands Ministry of Finance, led his country’s delegation.
CIMA stated that Cayman and Holland have agreed to conclude this TIEA in a timely manner and once signed it will add to Cayman’s growing list of tax deals with OECD countries. Cayman needs to have at least 12 deals in place and it currently has ten plus a number of unilateral deals signed under a specialist mechanism legislated last year which has not yet been recognised by the OECD.
Category: Headline News
Cayman here is a sign of the times to come, be very careful of what we sign. We could be very well scaring off our bread and butter.
Please visit http://www.businessweek.com/bwdaily/dnflash/content/jun2009/db20090628_851524_page_2.htm to see what I am talking about.
lets get off the stupid list
In case the person who wrote this does not know, the OECD "grey list" and the OECD "stupid list" are related, but they are quite different lists. The "stupid list" is the other list created by the OECD which evaluates how countries deal with the white list/ grey list process. Those countries which do stupid things go on the stupid list. Consider the following and guess where Cayman is headed –
First, the government ought to be taking a long term perspective and balancing the interests of those who can’t see beyond their next bonus with the interests of the rest of us as well as future generations of Caymanians.
Second, Cayman’s agreement with the US, which is readily available for anyone to read, was carefully crafted and does not read anything like what has been agreed in the last few days.
Third, doing whatever other countries say because they put you on a "list" is a ridiculous approach to dealing with other states and only invites the creation of more lists. Producing lists costs the OECD countries nothing and if they can get other countries to reduce whatever competitiveadvantages they may have by creating lists, they will continue to create lists until Cayman is out of business.
Inevitably there will be a new grey/white list this fall, or the number of agreements will change so that in order for Cayman to remain on the "white list" we will have to jump through more hoops, or there will be a new and completely subjective twists such as an opaque OECD assessment of the "quality of information provided" or a similarly opaque OECD assessment of the "substance of business activity" in Cayman, all aimed at making doing business in Cayman difficult.
In that regard and as a fourth point, there are a number of problems which will result from Cayman’s negotiators securing worse agreements than Cayman’s competitors are getting, as appears to be happening over the last few days. For one thing tCayman’s negotiators appear to be giving up more bargaining chips than they need to based on the agreements secured by other countries, meaning that there will be less to negotiate with in the inevitable next round and the demands will be greater based on the amount of give this time. By way of example, by including types of taxes that are not included by our competitors in the Channel Islands and elsewhere in their agreements, Cayman is actually creating a rod for its own back.
It is also important to bear in mind that "benefits" generally translate into the removal of discrimination against Cayman, improved or secured market access in other areas, or political payoffs like the Channel Islands are now getting – nice speeches from UK ministers based on pre-set number of signed agreements milestones.
Fifth, any country which has politicians who think that the grey list/white list process is about tax evasion, and that the OECD states will play nice if we simply help them stop tax evasion in their countries goes straight to the top of the stupid list.
Similarly an approach which requires getting off the grey list at any cost is not a good strategy.
lets get off the stupid list and try to negotiate some supplemental list for benefits later. i have heard enough about this grey list already!
guys, these agremeents do not result in automatic information being provided to anyone. this is on request. it is a framework that allows countries to request information ion tax related matters from each other.
we did this with america almost 9 years ago now and we became the largest domicile for hedge funds despite that. stop making a mountain out of a hill…
i cant comment on the politicalside of this but my guess is that both governments are doing the right thing in trying to secure these deals and get off that oecd list.
I guess we are fully intp the poliical age in cayman! can’t discuss anything without the words udp and ppm etc..anyway the current government can win either way. if they dont get agreements, we will remain on the grey list and they wil get criticised. if they sign agreements and we get off the grey list people will say well"what did we get from that"?
I don’t care which goverment deals with this but the fact is that we can talk all day about how we can strategise to secure benefits but these are actually very limited. if we dont play ball on these agreements (like most countries will be doing within the nex 12 months anyway) then eventually we will face limited access to certain OECD markets. and that will negatively impact our financial services industry. and that will seriously undermine our economy etc etc. so lets stop trying to have our cake and eat it too.
We have had a similar agrement with the United States and that gioves us 80% of our financial services business. and as far as i am aware we have been experience exponentialy growth rates since then…so it can’t be that bad can it?…
I notice that all has gone quiet re CIFSA / Travers
Like him or hate him Travers is a smart man. Perhaps he has finally realised that the course of action which he and CIFSA recommended to government plays directly into the OECD’s plan to end the "tax neutral platform" that he brags about in his letters to various Presidents and Prime Ministers. Perhaps he is also beginning to realise that the end of the "tax neutral platform" combined with the country’s current debt will allow the UK or perhaps even a Cayman government to force the introduction of income tax which will kill Cayman as a financial services centre.
As to the rest of those advising the government, I am not sure if or what they think.
UDP is an action Government.
Action based on a carefully reasoned long term strategy is a good thing. Acting without consideration of long term consequences is a short cut to disaster. I don’t care about UDP, PPM, ABC or XYZ. I do care that this government appears to be acting without any consideration of what their actions will do to Cayman in the long term. Why are they not securing benefits for Caymanians in these agreements?
If the UDP was so muchof an action team would all the agreements not have been signed four years ago?
I hope the Attorney General’st advice on this was better than on the SPIT if not dog will eat breakfast,lunch,dinner and supper.
I notice that all has gone quiet re CIFSA / Travers one minute they are all over this in the press sudenly all has gone quiet there been a difference of opinion / concerns about what should be signed
Credit has to be given when and where it is due. So congratulations to the Dutch negotiators. Dutch get what they want. Cayman gets nothing. Truly a magnificent result for the Dutch. Shame about the future of Cayman though.
I can see why the Dutch representative looks smug in the photo. It seems that the agreement that was signed with the Dutch by the government’s new technical advisors does not yet count towards the 12 that the new government is chasing. Given the precedent of the recent agreement with the Irish which provided Cayman with nothing, I suspect that the government’s decision not to provide any details to us dumb Caymanians means that the types of benefits secured for Cayman by the previous government in the UK and Norwegian treaties have been overlooked or neglected in this agreement. I am hoping that this does not become a pattern, particularly as our competitors in Jersey, and the Isle of Man seem to be getting benefits for their countries. If our negotiators can’t get the benefits that other countries are getting that is plain pathetic. All they have to do is look to see what the other countries are getting. That should not be too hard even for people entirely new to this type of activity.
UDP is an action Government.
I sure hope the PPM is taking notes.