Link: OECD pressure on tax havens pays off
The FO’s annual report makes clear the frustration of officials responsible for the UK overseas territories, who are being compelled to force Caribbean offshore island groups and other territories to accept the provisions of the EU directive on taxation of savings, which the territories ‘believe could adversely affect their economies’.
The report states baldly that ‘the year has not been without problems’, referring specifically to the directive.
It states under ‘lessons learned’ that ‘certain overseas territories (for example Anguilla, the British Virgin Islands, the Cayman Islands, Montserrat and the Turks and Caicos Islands) are concerned that the UK government’s decision to extend to them the provisions of the EU directive on taxation of savings will have an impact on their economies’.
The Foreign Office had supplied a dedicated officer to help the overseas territories apply for new EU aid to assist their alternative economic development, in particular the extension of airports and roads to assist the tourism industry.
The UK had to offer the Caymans – the last of the overseas territories to hold out against implementing the directive – tax concessions amid fears the territory would lose its financial services industry. The islands’ administration seriously considered breaking with London and going it alone.