Havens take the heat off leaders
Tax havens are unlikely candidates for public sympathy, but are some being treated unfairly in the global crusade against tax avoidance?
James Tipping, director of Gibraltar’s finance centre, thinks so. He laments
the criticism directed at the offshore center, arguing that Gibraltar doesn’t
promote itself aggressively and has a demanding application process for those
seeking a presence in the territory.
Gibraltar’s plan to standardise the corporate tax rate at a flat 10% from
July 2010 will see many multinationals move from a 0% rate. So far this has
resulted in no companies indicating a retreat.
The autonomous self-governing of Gibraltar’s financial services sector, like
others of its kind, has absorbed much of the criticism that would have otherwise
been squared at the UK during the downturn.
Offshore centers believe they have been scape-goated by politicians looking
to divert attention from their domestic difficulties, though the criticism has
largely come from the Organisation for Economic Development and Co-operation,
the body responsible for setting the guidelines.
The apparent rush of formalised tax information exchange agreements has been
subject to intense scrutiny, with many signed in the days leading up to April’s
G20 summit, but the fact these treaties continue to go ahead illustrates a
changing tide in global tax.
Many have since committed to signing the minimum of 12 agreements by the end
of this year in order to achieve ‘white-list’ status.
So, while politicians continue their campaign of weeding out blatant tax
evasion and directing attention away from themselves, surely credit is due in
acknowledging that some progress, albeit small, is better than none at all.
Judith Tydd is a reporter on Accountancy Age