SVG successfully completes Tax Transparency peer review

Saint Vincent and the Grenadines (SVG) has successfully completed Phase 1 of the assessment or ‘Peer Review’ undertaken by the Organization for Economic Co-operation and development (OECD) Global Forum on Transparency and Exchange of Information for Tax Purposes.{{more}} On April 5, 2012, the Global Forum officially adopted the report on SVG’s tax transparency regime, thereby giving the country the green light with respect to its legislative and regulatory tax information exchange framework.

Prime Minister and Minister of Finance, Dr Ralph E. Gonsalves, welcomed the recognition from the OECD’s Global Forum of SVG’s efforts in continuously strengthening its legal and regulatory framework, as well as its efforts in ensuring that all international standards are fulfilled. Dr. Gonsalves commended the teamwork of the country’s stakeholders in this process, particularly the Ministry of Finance, the Attorney General’s Chambers, the Inland Revenue Department, the Ministry of Foreign Affairs and the Commerce and Intellectual Property Office, led by the International Financial Services Authority, for ensuring SVG’s success in completing the arduous task of passing the ‘Phase 1 test’.

The Prime Minister also thanked his own administrative staff for their efficiency in addressing matters pertaining to Tax Information Exchange Agreements and the Phase 1 Review process.

The results of the assessment of SVG’s tax transparency regime were very positive, as the conclusion was made that the country’s legal and regulatory framework, in general, meets the international standards on tax transparency and effective ‘Exchange of information’ (EOI) for tax purposes. Out of nine (9) elements which were assessed relative to the country’s legal and regulatory framework, eight (8) elements were found to be in place. With only one (1) element ‘not in place’ and with the Global Forum’s adoption of the Report, SVG is set to move forward to Phase 2 of the Global forum’s Peer Review process, which is scheduled to take place in the second half of 2013.

SVG officially embarked on Phase 1 of the Peer Review Process on the 3rd of October 2011 which meant having its legal and regulatory framework as it pertains to the availability of information, access to information and the ability to exchange information for tax purposes, assessed by representatives of the Global Forum’s Peer Review Group. Over an additional four (4) months, SVG worked tenaciously with its Assessors who comprised tax experts from Argentina, Mauritius and the Global Forum Secretariat, to try to ensure as much as possible that SVG’s work and progress toward a strong and robust regulatory system were recognized. SVG was also called upon to formally respond to the draft report prepared by its Assessors, at the meeting of the Global Forum’s Peer Review Group from February 27th – March 2nd earlier this year in Brasilia, Brazil.

The OECD’s Global Forum on Transparency and Exchange of Information for Tax Purposes was created in 2000 to provide a more inclusive effort to achieving high standards of tax transparency and exchange of information that would be more equitable at the international level. In 2010, the Global Forum established in Peer Review Group to review jurisdictions’ tax regimes, in response to its quest for more improved tax transparency and exchange of information. The Peer Review Group launched its first set of reviews in 2010 and its aim is to assess all members of the Global Forum, as well as jurisdictions identified by the Global Forum as being relevant to its work, within a five-year period.

SVG became a member of the Global Forum in 2009 however, has worked with the OECD in relation to tax information exchange since 2002 and has since 2006, participated in all of the Global Forum’s annual assessments. In robust demonstration of its efforts, the Government of SVG passed the International Co-operation (Tax Information Exchange Agreements) Act, 2011 to ensure effective exchange of information with relevant exchange partners. To date, SVG has signed thirty-one (31) EOI agreements – one multilateral double taxation convention covering ten (10) jurisdictions and twenty-one (21) tax information exchange agreements; these twenty-one (21) agreements are with both OECD and non-OECD member countries. SVG continues to negotiate agreements with relevant jurisdictions.

A release from the Prime Minister’s office said “SVG intends to work towards having an equally successful Phase 2 Review, which is the second and final part of the Global Forum’s assessment. Phase 2 is an assessment of the practical implementation of the Global forum’s standards to determine the implementation of the country’s tax information exchange regime and whether there is in fact effective exchange of information for tax purposes. SVG will continue to work towards strengthening its tax transparency regime so as to maintain and enhance the integrity of its financial sector and its reputation for sound international investment.”