Turks and Caicos Islands is among twelve tax haven countries, which for the first time, provided information about the activities of some business entities located in the country to the countries where the entities’ parents or beneficial owners are tax resident, Organisation for Economic Co-operation and Development (OCED) recently announced.
Anguilla, the Bahamas, Bahrain, Barbados, Bermuda, British Virgin Islands, Cayman Islands, Guernsey, Isle of Man, Jersey, Turks and Caicos Islands, and the United Arab Emirates, followed standards set out by the OECD’s Forum on Harmful Tax Practices, the OECD said.
The information disclosed by the 12 countries includes the identity of the entity, its activities, and the ownership chain of entities.
“Today’s first exchanges of information on the previously unknown operations of entities in low tax jurisdictions are good news for tax administrations around the world, as they will now have regular access to information on the activities and income of entities in low tax jurisdictions that are held or controlled by their taxpayers,” said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration.
The new disclosures are required for entities located in no or nominally taxed jurisdictions that derive income from geographically mobile activities, such as headquarters, distribution centers, service centers, financing, leasing, fund management, banking, insurance, shipping, holding companies, and provision of intangibles.
Disclosures are only required if the entity does not conduct income-generating activities in the tax haven county. Thus, for mobile income other than IP income, no reporting is required if staff and expenditures are adequate and that the country can identify and enforces noncompliance.
The OECD-led Inclusive Framework on BEPS, now comprised of 139 countries, agreed to require the disclosures in November 2018.
The exchanges will enable receiving tax administrations to carry out risk assessments and to apply their controlled-foreign company, transfer pricing, and other anti-base erosion and profit shifting provisions, the OECD said.
This article was first published by Julie Martin, MNE Tax
