TaxPersonal TaxObama tax haven Act may threaten Channel Isles

Obama tax haven Act may threaten Channel Isles

Channel Isles threatened by tougher rules on UK-controlled tax centres set by President-Elect Barack Obama

Jersey

Jersey

A crackdown on offshore tax havens by Barack Obama could set a precedent for
tougher rules on UK-controlled tax centres, such as the Isle of Man and Jersey,
according to an offshore tax expert.

The US Stop Tax Haven Abuse Bill is expected to be one of the first proposed
laws that Obama signs in January. It aims to encourage offshore havens to work
toward removing themselves from a ‘black list’ compiled by the Organisation for
Economic Co-operation and Development.

The black-listed countries are accused of lacking financial transparency and
standing in the way of international efforts to combat money laundering and tax
evasion.

Richard Murphy, tax campaigner at the Tax Research Network, said while the
bill won’t directly impact relations between the UK and offshore tax
jurisdictions, it sets a precedent likely to be followed here.

‘They [US] take the lead and everyone joins in and says we want to introduce
similar sanctions,’ he said.

‘The bill means it’s going to be harder for people to use places like the
Isle of Man. The implication is there will be less business going there,’ he
said.

European leaders have been discussing how to reform the European Union
Savings Tax Directive as part of a drive to stop wealthy investors hiding their
money in offshore tax havens to avoid paying tax.

Speaking at a tax conference last week Philip West, former head of
international tax at the US Treasury, said more pressure was needed to make
offshore tax havens become more open.

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