André Ebanks, Cayman Islands Minister of Financial Services and Commerce, defended his country’s tax policy, denying the label ‘tax haven’, on Monday 14 November, during his hearing at the European Parliament’s Subcommittee on Fiscal Affairs (FISC).
“We are an investment hub, meaning a jurisdiction that facilitates the transit of investment through favourable fiscal conditions, including a stable legal environment and political regime”, he said, using definitions from the 2015 United Nations Conference on Trade and Development report.
“We do not seek to attract illicit finance. We do not want to deprive countries of the taxes that are owed to them”, he assured. During his hearing, he referred to a document that summarises the adoption of transparency rules chronologically. Mr Ebanks pointed to a “strong track record of cooperation”. “When the world provides a standard and says that a type of activity is unacceptable, the Cayman Islands adapts and implements those standards”, he added.
Asked by Gilles Boyer (Renew Europe, French) about the OECD agreement on minimum taxation of companies, Mr Ebanks reported that it had been “adopted and agreed without debate”, (see EUROPE 12977/4). “In line with the principles of tax transparency, this agreement does not require a change of taxation regime, but will require the provision of an additional level of reporting and information exchange, so that direct countries can assess whether or not entities in their home country are paying up to 15%”, he said.
FISC subcommittee chair Paul Tang (S&D, Dutch), who felt that Mr Ebanks was refusing to face the truth, pointed to the Cayman Islands’ poor rankings in various NGO lists, including the Tax Justice Network’s Financial Secrecy Index.
The Minister contested this list, considering that the methodology behind the ranking does not follow any agreed international standards. “The mere fact that a country has a system of indirect taxation is enough to give it a high secrecy index”, he said.
Claude Gruffat (Greens/EFA, French) focused on the European ‘blacklist’ of non-cooperative countries in tax matters (see EUROPE 12833/24).
Mr Ebanks welcomed the removal of his country from the list (see EUROPE 12575/8). However, he gave more details on the impact of the European money laundering ‘blacklist’ (see EUROPE 13057/2). He explained that, in line with the recommendations of the OECD’s Financial Action Task Force (FATF) in its 2019 evaluation, his government had implemented 62 of the 63 recommendations. “I expect that once the FATF has assessed that we have cleared and addressed the only remaining deficiency, we should automatically be removed from the EU ‘blacklist’” he hoped.
To read Ebanks’ paper: https://aeur.eu/f/41z (Original version in French by Anne Damiani)