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:

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out: G20 agree on need for information sharing

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boost expected from uncertainty in offshore centres