When is a tax haven not a tax haven?

Wednesday 29 April 2009 by

The US Government is unfairly bracketing co-operative offshore centres with 'abusive tax havens', says Ed Shorrock, director of forensic and regulatory services at international law firm Baker Platt, which has an office in Jersey.
Alarmed at the stance of new US president Barack Obama, who endorses the Stop Tax Haven Abuse Act (STHAA), Mr Shorrock has warned that Jersey, along with Guernsey, the Cayman Islands and others, is being unjustly targeted as the president seeks to deal with the fact that 'the US Government loses US$100bn a year' through tax avoidance strategies.
'From Jersey's point of view,' Mr Shorrock added, 'this is extremely unfair, as it signed a tax information exchange agreement with the United States as long ago as 2002.'
Mr Shorrock described the 'evidence' on which the US Government's approach is based as 'worryingly reminiscent of the flimsy and flawed intelligence that laid the path for the invasion of Iraq.' He questioned the methodology used and said that assumptions made 'are as arbitrary as those used in drawing up the notorious blacklist of "offshore secrecy jurisdictions."'
A report by the US Government Accountability Office acknowledged that there was no agreed definition of a tax haven or an agreed list of jurisdictions that should be considered tax havens.
'Time will tell,' Mr Shorrock concluded, 'whether this new offensive will be sidelined by more pressing issues.'