Guernsey and Mauritius have been removed from the Italian finance authority’s revised blacklist of tax havens as a result of more openness on exchanging tax information, reducing Italian concerns about potential tax abuse
This follows the enactment of the new Stability Law 2015 which came into force in Italy earlier this year.
On 1 April 2015, the Italian Ministry of Economy and Finance issued new black lists relevant for specific anti-tax havens rules in Italy. New rules mean that Italy requires a greater burden of proof from companies which use the Controlled Foreign Companies regime (CFC rule) and those those which have not signed a specific exchange of information agreement with Italy
Hong Kong and Switzerland have signed new tax information sharing agreements, which are waiting to be raitifed, according to an EY briefing paper on the topic.
Italy took the decision to remove Mauritius from the list in recognition of the effectiveness of the Mauritius tax exchange information system. Another factor is that the provisions of information exchange between the two countries in terms of taxes are considered robust and effective in preventing the risk of tax evasion in business transactions.
Guernsey was originally placed on the OECD ‘white list’ for exchange of information standards in 2009, and went on to sign a Tax Information Exchange Agreement (TIEA) with Italy in September 2012, which came into force earlier this year.
Sinéad Leddy, head of technical at Guernsey Finance, which represents the island’s finance industry internationally, said: ‘This is welcome news for the practitioners within our finance industry as it should open up some interesting opportunities across the finance sector but particularly within the private wealth sector.
'The only disappointment is that it has taken so long for Italy to overcome some outdated prejudices and recognise the high standards of tax information exchange applied in Guernsey.’
Leddy said Guernsey has been participating in the OECD’s Convention on Mutual Assistance in Tax Matters (MAC) since August last year, while in October 2014 Guernsey agreed to be among the first wave of jurisdictions to adopt the OECD’s Common Reporting Standard (CRS).
‘All of the above demonstrate Guernsey’s ongoing commitment to meeting leading global standards for tax information exchange. I’m pleased that this has now been recognised by the Italian tax authorities and we look forward to other jurisdictions following suit. Guernsey Finance will be working in partnership with industry and government to ensure that progress on such matters is made as quickly as possible,’ Leddy said.
The EY briefing paper is available here
