Reprinted from the Financial Times Letters Section 10.2. 2015
Sir, with his comments on the role of the overseas territories, Labour leader Ed Miliband shows himself as more hopelessly out of touch in relation to international tax avoidance than in relation to domestic matters. In fact, the overseas territories have maintained complete records on ultimate beneficial ownership to the international gold standard set by the OECD for more than two decades.
Quite what the OECD would make of Mr Miliband’s threatened report, given the OECD’s own verification on the subject and the Overseas Territories’ commitment to the OECD Automatic Reporting Standard, is a matter for conjecture and possible further embarrassment. Nor, in the light of the unlimited powers to undertake investigation of these beneficial owners granted by the overseas territories to the Internal Revenue Service and HM Revenue & Customs by treaty, does Mr Miliband’s suggestion that the “authorities” have been hampered in undertaking tax investigations bear any relation to the reality.
OECD secretary-general Angel Gurria has stated that companies cannot be blamed for taking advantage of lawful tax avoidance, and indeed it is to domestic tax legislation on transfer pricing (ironically based on the OECD model) that Mr Miliband should look if he wishes to capture the “billions” to which he refers.
An informed politician genuinely concerned about tax evasion and tax avoidance as opposed to making populist soundbites should be lauding the standards of transparency set by overseas territories as the example to which other jurisdictions, notably the wholly opaque US corporate centres of Delaware, Wyoming and Nevada, should now be held, and making a more details inquiry into the double tax treaty abuses that are routinely adopted in the European centres.
Cayman Islands Stock Exchange
George Town, Cayman Islands