As a result of their decision, the two islands will no longer appear on a the list of 35 jurisdictions labelled as tax havens.
And they have have been invited, together with the other committed jurisdictions and OECD member countries, to the OECD’s Global Forum to discuss the design and implementation of standards.
The OECD made the announcement today, saying both crown dependencies had agreed to improve the transparency of their tax and regulatory systems.
Furthermore, they will also ‘establish effective exchange of information for tax matters with OECD countries by 31 December 2005.’
Guernsey and Jersey’s about turn is yet another victory for the OECD’s in its attempts to put an end to harmful tax regimes across the globe.
But Jersey, along with the British territories of Gibraltar, Montserrat, the British Virgin Islands, the Turks and Caicos Islands and Anguilla are all on the list and face the threat of having favourable tax treaties scrapped and other harsh penalties unless they agree to OECD reforms.
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The firm says that the U-turn 'does not alter the need for a fundamental review of the way we tax work' and that the current tax system is in need of reform
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