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- Saint Lucia Expands Its Capacity to Fight International Tax Avoidance and Evasion
Saint Lucia today signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Saint Lucia became the 107th jurisdiction to join the Convention. Hon. Allen Michael Chastanet, Prime Minister and Minister for Finance, Economic Growth, Job Creation, External Affairs and Public Service, signed the Convention in the presence of the OECD Secretary-General, Angel Gurría.
|OECD Secretary-General, Angel Gurría with Hon. Allen Michael Chastanet, Prime Minister and Minister for Finance,
Economic Growth, Job Creation, External Affairs and Public Service, Saint Lucia
OECD Headquarters, Paris, 21 November 2016
The Convention provides for all forms of administrative assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange, tax examinations abroad, simultaneous tax examinations and assistance in tax collection. It guarantees extensive safeguards for the protection of taxpayers' rights.
The Convention was developed jointly by the OECD and the Council of Europe in 1988 and amended in 2010 to respond to the call by the G20 to align it to the international standard on exchange of information and to open it to all countries, thus ensuring that developing countries could benefit from the new more transparent environment.
Since then, the Convention has become a truly global instrument. It is seen as the ideal instrument for the swift implementation of the standard on exchange of information on request and the new OECD/G20 Standard for Automatic Exchange of Financial Account Information in Tax Matters. The signing and ratification of the Convention is therefore very timely since Saint Lucia has already signed the CRS Multilateral Competent Authority Agreement (MCAA) based on Article 6 of the Convention to operationalise automatic exchange of financial account information. The Convention can also be used to swiftly implement the transparency measures of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project such as the automatic exchange of Country-by-Country reports under Action 13 as well as the sharing of rulings under Action 5. A powerful tool for the fight against illicit financial flows the Convention also enables jurisdictions to implement the commitments they have each made as members of the Global Forum on Transparency and Exchange of Information for Tax Purposes.
- "Saint Lucia to Meet Global Standards of Transparency," Says PM
|OECD Secretary-General, Angel Gurría with Hon. Allen Michael Chastanet, PM & Minister for Finance|
Prime Minister Honourable Allen M. Chastanet on Monday, November 21, 2016 signed the Convention on Mutual Administrative Assistance in Tax Matters. The Convention will enter into force in 2018 and will enable the government to automatically exchange information.
This multilateral instrument is the most comprehensive mechanism available for all forms of tax cooperation and will tackle tax evasion and tax avoidance, making it a top priority for all countries.
At the brief signing ceremony in Paris, France Prime Minister Chastanet said:
“Despite our many challenges we stand resolute, with the rest of the world, to address vital issues such as tax avoidance and evasion. Having signed the Multilateral Competent Authority Agreement (MCAA) in October 2015, we have continued to work assiduously towards the signing of this Convention and towards the development of enabling legislation. We have received assistance from the Global forum and OECD Secretariats in this regard, and indeed we are grateful. The necessary legislation has already been drafted and will be enacted in time for the due diligence process to begin in January 2017.”
The Prime Minister explained that coming off the heels of the first Foreign Account Tax Compliance Act (FATCA) reporting period, the learning curve for the implementation of the Common Reporting Standard (CRS) is envisaged to be significantly reduced.
“The task ahead is by no means an easy feat. We have apprised the stakeholders in the financial sector of the Common Reporting Standard, but there is still significant ground work to cover.”
Since 2009 the G20 has consistently encouraged countries to sign the Convention which has been opened for signature from 2011. This cooperation ranges from the exchange of information to the recovery of foreign tax claims.
PM Chastanet asserted that “Saint Lucia has heeded the call of the global community with respect to the exchange of information.
“It has not always been an easy journey as there are onerous costs associated with the implementation of international standards; and at times we have had to take unpopular decisions, for the greater good. Let this signing be a testament to our continued commitment to meet globally acceptable standards on transparency and exchange of information for tax purposes.”
The Convention was developed jointly by the Organization of Economic Cooperation and Development (OECD) in 1988 and was amended by Protocol in 2010.
Caribbean Jurisdictions already participating in the Convention on Mutual Administrative Tax Matters include Barbados, Anguilla, Aruba, Belize, British Virgin Islands, and Cayman Islands among others.