The Channel Islands have followed the UK in suspending all forms of tax cooperation with Russia, including the exchange of tax information, in response to the war in Ukraine.
The UK government said in a statement last week that tax information is exchanged as part of global collaboration to address tax-compliance risks.
But no longer exchanging such information would ensure the UK is not supplying Russian President Vladimir Putin’s regime with information that could lead to an increased tax benefit or yield for Russia.
The UK, Guernsey and Jersey are, like the Cayman Islands, members of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. This is the tool used for the multilateral exchange of taxpayer information between 144 jurisdictions.
Governments in the Channel Islands said suspending cooperation under the treaty with Russia, which is also a member, would ensure that the Russian government cannot use the information to grow its tax revenue.
Jersey’s minister for external relations and financial services, Senator Ian Gorst, said in a statement, “At a time when Jersey has imposed economic sanctions on Russia, we should not be providing the Russian government with information which it can use to increase its tax revenues.
“In this we are aligned with the approach taken by the UK Government.”
The multilateral exchange of information on taxpayers’ funds and assets with their home country is one of the main tools to prevent tax evasion and profit shifting.
Deputy Susie Pinel, Jersey’s minister for treasury and resources said the unprecedented decision reflected the extent to which the Russian government has isolated itself from the global community by its actions in Ukraine.
“It does not however affect Jersey’s commitment to international standards in tax transparency and the exchange of information,” she added.
In Guernsey, deputy Mark Helyar, treasury lead for the policy and resources committee echoed these statements, saying Guernsey’s decision was an appropriate part of the international response to the invasion of Ukraine.
He noted that “Guernsey will, of course, continue to meet all of its other commitments to international standards and agreements on tax transparency and the exchange of information with all other partner jurisdictions.”
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