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Cayman to sign tax agreement with Australia

Published:Wednesday | March 31, 2010 | 12:00 AM

McKeeva Bush, premier of British dependency, Cayman Islands, travelled to Washington on Tuesday to sign a tax information exchange agreement with Australia.

Cayman has penned 14 similar agreements in conformity with internationally-agreed tax standard, established by the Paris-based Organisation for Economic Cooperation and Development (OECD), and at the urging of its United Kingdom parent.

Last April, when the OECD compiled its three-tier list on tax compliance, the Cayman Islands was placed on a 'grey list' of countries that had committed to the internationally agreed tax standard, but had not yet substantially followed through on their implementation.

The Cayman Islands was among the first to graduate to the 'white list' of jurisdictions that includes tax havens with a higher degree of compliance.

In order to move from the grey list to the white list, countries are required to sign at least 12 tax information exchange agreements.

The Cayman Island is about to sign its 15th, and says it will double that amount.

It already has agreements with Denmark, the Faroe Islands, Finland, France, Greenland, Iceland, Ireland, the Netherlands, Netherlands Antilles, New Zealand, Norway, Sweden, the United States and the United Kingdom.

The Finance Ministry plans to sign another 15 agreements with Aruba, Canada, Germany, Italy and South Africa already being lined up.

"The results of our negotiation programme along with the negotiating team's deep involvement in helping to shape international standards in tax transparency through active participation in key initiatives is commendable, and has been recognised by the OECD and the global community," Premier Bush said on the matter last week.

"We look forward to continuing this engagement and doing our part in demonstrating the effectiveness of our transparency regimes and our expertise as a jurisdiction."

Barbados and the US Virgin Islands were the only Caribbean states on the OECD's white list when it was compiled last year.

Other Caribbean countries have since graduated to that list - Antigua and Barbuda, Aruba, Bahamas, Bermuda, British Virgin Islands, Netherlands Antilles, and Turks and Caicos Islands.

That leaves Belize, Dominica, Grenada, Montserrat and St Lucia as the only remaining Caribbean countries on the grey list.