More tax deals coming

| 28/08/2009

(CNS): The government has plans to sign another 16 Tax Information Exchange Agreements, the Leader of Government Business, McKeeva Bush said this week. Eight countries are almost ready to sign new TIEAs and a further 8 are in the process of negotiation. However, the opposition has questioned some of the TIEAs which Bush recently signed and raised fears that Cayman is losing a competitive advantage by signing deals that have not held the line on certain conditions over indirect tax or gained benefits for the country.

Bush in his role as Minister for Financial Services brought a motion to the Legislative Assembly on Wednesday to add the 11 agreements which the Cayman Islands government has signed over the last year to the schedule of the Tax Information Authority Law. With the formalisation of the agreements the Leader of Government Business said that the country had not only made the coveted OECD white-list but had regained its credibility in the eyes of the financial world. Bush acknowledged the contribution made by the opposition and thanked them for “what little they did” but then told them that the reason why Cayman had ended up on the grey list in the first place was because of the previous government’s failure to sign enough agreements in time. He said his government had rescued the financial community from the rocky road of gamesmanship they had played.

However, while the former minister with responsibility for the financial services Alden McLaughlin, welcomed the motion, he warned that appeasing the OECD for a moment in time to remove the country from a list did not necessarily serve Cayman’s best interests as the organisation could replicate the list at the drop of a hat.

He said that during the negotiations with which he was involved the PPM government had sought to negotiate commercial benefits for Cayman and hold the line on certain issues regarding indirect taxation. But, he said that he the UDP government had made concessions in the agreements this administration had negotiated with both Ireland and the Netherlands that went beyond the models required by the OECD.

After pointing out that most of deals were signed and negotiated under the PPM McLaughlin said his government had taken the position, and he thought Bush had previously agreed with it, that Cayman should gain something with the deals and attain a level playing field. He said holding the line and holding out on signing some deals had not always found favour but he still believed it was correct to try and protect Cayman’s interests. “I still believe it was the correct line to take because when everyone is on the white list if we entered into a deal with a commercial disadvantage that’s a problem,” McLaughlin noted. “There ought to be commercial advantage for us for entering into these agreements, but it seems to me, from scrutinizing part three of the agreements with Ireland and the Netherlands, there are concessions exceeding the model tier.”

 McLaughlin said that the UDP government had agreed to supply information regarding indirect taxation in those countries which is not part of other agreements. The only exception he said was VAT (Value Added Tax) with the UK which he said given the relationship between Cayman and that country there was a concession.

McLaughlin went on to say that there had always been a strong economic component to these deals and Cayman should be careful and see these things in the round. He said that signing for the sake of it would not protect Cayman from the constant onslaught from the world’s major economies over this issue.  “It is not a matter of getting off lists,” hes aid. “There’ll be another one soon.” He said the OECD was already spinning new compliance webs for the forthcoming G20 meeting in September.

Bush, however, said that the only commercial disadvantage had been caused by the PPM who had lost the offshore sector money because of getting the country blacklisted.  He comes talking about commercial benefits,” Bush said of McLaughlin, “when he sat down for four years and made us lose revenue because he did nothing.”

The Minister said the government had worked hard to get Cayman on the white list and the country was now positioned to begin a new phase of growth and his government would be seeking to cooperate properly and listen to the financial services sector. He denied there was a problem with article three on the two agreements and said as it was the same as the UK and it made no difference. Bush also stated that he had got commercial benefits with all the ones that were now signed.

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  1. Anonymous says:

    Clearly MAC and Co just do not get it and never will. They have no idea of the long term damage that they are doing to Cayman by signing these worthless (to Cayman) documents – or perhaps they do know what they are doing and do not care as they are all getting what they want whether in the form of "consulting" fees or otherwise. They clearly do not care that they are signalling to the UK and the other OECD countries that the leadership in Cayman these days is comprised of idiots and that now is the time to destroy Cayman’s financial services sector.

    Cayman’s competitors are signing treaties that give them competitive advantage – but what the heck – MAC gets to travel first class with his cronies to sign away our futures – that ought to be good enough for all of us and our children with no future.

    • Anonymous says:

      They’re talking about how the PPM made history with the deficit. Well wait until the UDP are finished with us.. We all will be HISTORY then!.. Power hungry vulchers.

  2. Cool Breezes says:

    Does this mean more tax-trips?! 

    Tax-trips + more $$?

    Tax-trips = $$

    Mr. Bush mentioned that the country/ offshore sector lost money by being blacklisted, but is being white-listed costing us to loose money as well? Or maybe that’s one of those short term losses and long term gain.. I just think that since Cayman is on the white list now, the other 16 agreements (if we must) can wait.

    • Anonymous says:

      "Agreements can wait"

      The reason why we keep having to scramble to catch up with rest of the world is because we have not been proactive enough to stay ahead of these international bodies; what the leader is doing is the right thing to do, everytime we end up on these lists it has serious impact to our reputation and as a result potential clients by-pass us for other jurisdictions. It amazes me that people out there can’t understand this…no wonder we got it so wrong the last four years….

      • Anonymous says:

        You are right that the OECD will continue to shift the goalposts. However, we should make sure that we are gaining some benefit from any new TIEAS or double taxation agreements rather than rushing to enter into them.  Incidentally, the failure to be proactive was not simply in the last four years. Mr. Bush’s  previous govt. also failed to be proactive and sign up any agreements in that term 2001-2005 even though Cayman had committed to do so in 2000. Plenty of blame to go around.

      • Anonymous says:

        Get real – how gullible are you. We get on lists designed by our competitors just because we are competitors of the US and the UK. Until we abandon our financial services sector and go back to tending our ground and serving drinks to fat tourists from the countries that are putting us on lists we will always be on lists. I cannot believe that after all of this time anyone actually believes that these lists have any legitimacy – get real. 

        The only countries from the 1998 OECD list that the OECD have stopped putting on lists are Tonga and the Maldive Islands because they have formally agreed never to compete with OECD countries again – take a look it is even on the OECD web site.

        People who blindly accept that their oppressors are just have the psychiatric condition known as Stockholm Syndrome – this form of craziness seems to be rampant in Cayman.

    • Anonymous says:

      whether or not the agreements are necessary….do we really need to travel to Timbuktu every time we need to sign an agreement? what happened to FedEx?  Every day of the week million dollar transactions move around the world by FedEx!


      • Anonymous says:

        Amen to what happened to fed ex, better yet, they want us to sign a contract let those sleezy bastards come to us, its them that want to sink us so why bow down any lower to them, I am sick to my stomach when I think that this have been going on for 5 or 6 years and not one of these so called leaders, PPM or UDP have the balls to stand up and say no more.

        United states have tax avoiding areas too, so do the UK, but the fact is that they have taxed their citizens so much that they look for some where else  to put their  investment dollars, if they did not kill their own people  with taxation maybe the money would stay in their coffers, but no, they look at  this little island as a thorn,as they feel that we should not enjoy the benefits that come with the tax protection as they refer it to.There are  so many making a living here, and good at that,  so mother Uk, says we will destroy you, so they put the pressure on USA, and Bama he needs to save all of the acorn people that put him in power, he steps up and assist Uk to put the screws to us.SO what happens?     BIG MAC falls victim to their bullying and as the domino effect goes so goes Cayman.Taxes, why Mr.Gordon Brown? because you know that if we have to go that route a majority  of the investors that have property  here are   U S citizens and they will flee and go to another jurisdiction with out the taxes, well planned Brown,now put your head in a brown paper bag and hide.

        Cayman we need to ban together to overcome this travisty that is happening here, if it means indepenence, then lets go for it,let the politicians know,  England dont give a damn what happens to us, remember IVAN.

  3. Anonymous says:

    "…the country had not only made the coveted OECD white-list but had regained its credibility in the eyes of the financial world"

    According to Mr. Bushs’ adviser-in-chief, Tony Travers, the financial world were "well aware of the extensive nature of Cayman’s treaties on tax transparency", and regarded Cayman’s grey listing as a "temporary mischaracterisation".

    There is no hard evidence that we lost revenue as a result of grey-listing (not blacklisting as claimed).