G8 tax treaty in jeopardy

David Cameron’s efforts to get all Britain’s overseas territories and crown dependencies to sign up to an international convention on tax transparency ahead of the G8 summit are in disarray after Bermuda said it was not ready to commit to the agreement reports Sarah Buswell of Harris & Co chartered accountants as part of their ongoing accountancy services to local businesses.

Bermuda"s Premier Craig Cannonier said in an interview with Reuters that while he was ready to accept wider sharing of information with international tax authorities, he was not ready to commit to signing the OECD"s multilateral convention on mutual administrative assistance on tax matters, which has been agreed by more than 50 countries.

Cannonier said: ‘There"s some clauses in there that we need to look at, that may need to be adjusted, and ... our finance ministry is going over it with a fine-tooth comb.’

Cannonier said Bermuda already met most of the standards in the OECD convention, including having a register of beneficial owners of companies that other tax authorities can check, but said that other elements in the agreement were potentially damaging for Bermuda.

Bermuda’s Premier said the country might consider tighter rules so that Bermuda-registered subsidiaries needed to have more economic substance on the island to enjoy its tax benefits.

Cannonier questioned whether Cameron would achieve broad agreement from all the territories this week, to sign up to the convention. However, a spokesman for the Cayman Islands government said it had signalled its agreement last week. Jersey, Guernsey and the Isle of Man have signed up and British Virgin Islands have agreed in principle