Offshore centers push multilateral TIEAs

Offshore financial centers are advocating multilateral tax agreements as the model for achieving greater international tax co-operation and transparency.

The most common TIEA is currently a bilateral agreement, with two parties negotiating the terms of an agreement, however Jersey and the Isle of Man both consider multilateral agreements the way forward.

Malcolm Couch, assessor of income tax on the Isle of Man, said bilateral agreements don't always suit the tax policy of the negotiating countries.

Some of the countries have small administrations, often as few as two or three people, so getting involved in a large number of negotiations is a big commitment.

'That's why the OECD is considering a multilateral approach…it's to build the capacity. Multilateral TIEAs has to be a model of the future,' he said.

Couch said part of the appeal of multilateral TIEAs lies in having agreements signed quicker, with the OECD playing an important role.

'They're examining the mechanics to speed up the process. I think a more multilateral, consensual approach would speed things up,' he said.

According to Geoff Cook, chief executive of Jersey Finance, the likelihood multilateral agreements becoming more prevalent has also been fuelled by pressure from the G20 nations.

'The challenge for OECD is that people do press forward with the agreements. There will be a drive now following the G20 to get on board with non OECD G20 countries and EU countries,' he said.

Further Reading:

Secret's out: G20 agree on need for information sharing

Fee boost expected from uncertainty in offshore centres