BASSETERRE, St. Kitts – PROGRESS made by the Federation in meeting international tax requirements has met yet another hurdle as the French government announced St. Kitts and Nevis would be blacklisted as an offshore financial centre.
A recently-announced 2010 decree, signed by French Finance Minister Christine Lagarde and Budget Minister Eric Woerth, lists 18 countries located outside of the European Union that the French government deems “uncooperative” as it relates to the signing of Tax Information Exchange Agreements (TIEAs).
Caribbean countries on that list include Anguilla, Belize, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia and St Vincent and the Grenadines.
Early this week, the government of France declared its intention to impose greater taxes on all domestic companies that have operations in those jurisdictions.
According to media outlet Le Figaro, taxes on dividends, interest and license fees that flow through these tax havens will be increased from 15 to 50 per cent. In addition, a 95 per cent tax exemption on dividends paid by subsidiaries to domestic parent companies will be annulled if the subsidiary is active in one of the countries on France's black list.
A year ago, the Federation’s financial sector was significantly threatened when global leaders of the G20 agreed to introduce sanctions on “secretive” tax havens around the world. This resulted in the Paris-based Organization for Economic Co-operation and Development (OECD) publishing a list of 30 countries that have committed to their tax standard, but have not substantially implemented it.
While the nation has made much progress to meet the OECD’s required minimum of 12 TIEAs to be in compliance with their standards, news of France’s blacklisting is not likely to be well-received.
Attempts to reach St. Kitts Investment Promotion Agency (SKIPA) CEO Shawna Lake, who has been appointed by Prime Minister and Minister of Finance Hon. Dr. Denzil Douglas to deal with such tax agreements, were not immediately successful.
Similarly, at news time SKNVibes was unable to reach Paul Ashe of the Financial Services Regulatory Commission (Antigua and Barbuda), who currently chairs a team of finance experts charged with addressing tax agreements in a regional response.
SKNVibes has however learned that the Prime Minister is expected to make a response to the nation being blacklisted later today (Feb. 17) at his monthly press conference.
