§ Lord Pearson of Rannochasked Her Majesty's Government:
How they reconcile the assurance given by Lord Bassam of Brighton on 5 April 2000 ( HL Deb, cols 1295–96) that they would promote the European Union code of conduct with the Channel Islands "within the framework of their constitutional arrangements" and the Written Answer given by Lord McIntosh of Haringey on 21 May (WA 91) "to protect the UK tax base, the Financial Bill includes the reserve power to bring within the charge to tax under the controlled foreign companies (CFC) legislation all CFCs that are located in overseas jurisdictions where harmful practices continue to be prevalent". [HL4620]
§ Lord McIntosh of HaringeyClause 88 in the Finance Bill gives the UK the reserve power to introduce regulations in the UK to protect the UK tax base. The clause concerns the UK tax liability of UK resident companies and does not affect the constitutional arrangements with the Channel Islands.
45WA
§ Lord Pearson of Rannochasked Her Majesty's Government:
Further to the Written Answer by Lord McIntosh of Haringey on 21 May (WA 92), whether they wish harmful aspects of the tax regimes in the European Union and their dependent or associated territories to be terminated in the absence of similar agreements and standards everywhere else in the world. [HL4622]
§ Lord McIntosh of HaringeyThe Government support fair tax competition and the abolition of harmful tax measures on as wide a geographical basis as possible. Regarding the code of conduct, the UK supports the timetable agreed by the ECOFIN on 26–27 November 2000 regarding the rollback of harmful measures.
§ Lord Pearson of Rannochasked Her Majesty's Government:
Further to the Written Answer by Lord McIntosh of Haringey on 21 May (WA 92), whether any extensions or delays have been granted to Luxembourg or any other European Union member states in their implementation of ECOFIN's requirements on business taxation; and, if so, what they are. [HL4623]
§ Lord McIntosh of HaringeyNo extensions or delays have been granted.
§ Lord Pearson of Rannochasked Her Majesty's Government:
Further to the Written Answer by Lord McIntosh of Haringey on 21 May (WA 91), whether they will conduct an independent analysis of the effect on the economies of the Channel Islands, the Crown dependencies and the City of London of introducing ECOFIN's requirements on taxation before such requirements are introduced. [HL4624]
§ Lord McIntosh of HaringeyThe Government have held a number of meetings with Jersey, Guernsey and the Isle of Man to discuss the EU tax package.
The authorities in Jersey and Guernsey have recently announced that they intend to recommend to their respective Parliaments that they should move to exchange of information on savings income.
In announcing the decision in Jersey, the President of Jersey's Policy and Resources Committee, Senator Pierre Horsfall, said, "We believe that the impact of this change on our economy is likely to be negligible and that our customers will welcome the certainty this will provide looking forward".
In announcing the decision in Guernsey, the States Supervisor said, "It is also in the Island's best long-term economic interests since it protects both our finance industry's competitiveness and the Island's reputation as a responsible and co-operative jurisdiction".
The Government do not believe that further analysis would add anything useful, but are always willing to discuss issues with the Islands.
46WAThe effect on the economies of Jersey, Guernsey and the Isle of Man of adopting the principles of the Code of Conduct on Business Taxation would depend on the nature of the tax changes introduced to replace the current harmful features. The purpose of the Code of Conduct on Business Taxation is to remove practices that distort competition, and in particular those that discriminate against residents.
Regarding the City of London, the Government's support for the draft Directive on Savings followed extensive discussions with interests in the City, which indicated clearly that an approach based on exchange of information rather than a withholding tax was the right way to proceed. The Government introduced legislation in 2000 requiring details of UK savings income of EU residents to be collected and reported to the Inland Revenue. And the UK has no tax measures considered to have harmful features by the report of 29 November 1999 of the Code of Conduct Group on Business Taxation.
§ Lord Pearson of Rannochasked Her Majesty's Government:
Further to the Written Answer by Lord McIntosh of Haringey on 21 May (WA 92), which countries have signed up to the international standards of fair tax competition. [HL4625]
§ Lord McIntosh of HaringeyThe EU Code of Conduct on Business Taxation was agreed in 1997 by all 15 EU member states.
Australia, Austria, Canada, the Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Korea, Mexico, the Netherlands, New Zealand, Norway, Poland, the Slovak Republic, Spain, Sweden, Turkey, the United Kingdom and the United States agreed the standards of fair tax competition as most recently set out in the OECD's 2001 progress report.
Of the 35 jurisdictions identified by the OECD in its 2000 report as meeting the criteria of tax havens, the following 28 jurisdictions have since changed their legislation or made commitments to co-operate with the OECD principles: Anguilla, Antigua and Barbuda, Aruba, the Commonwealth of the Bahamas, Bahrain, Barbados, Belize, British Virgin Islands, Cook Islands, the Commonwealth of Dominica, Gibraltar, Grenada, Guernsey, Isle of Man, Jersey, the Republic of the Maldives, Montserrat, Netherlands Antilles, Niue, Panama, Samoa, the Republic of the Seychelles, St. Lucia, the Federation of St. Christopher and Nevis, St. Vincent and the Grenadines. Tonga, Turks and Caicos and the US Virgin Islands. A further six jurisdictions made commitments to co-operate prior to publication of the 2000 report: Bermuda, Cayman Islands, Cyprus, Malta, Mauritius and San Marino.