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Gibraltar maintains OECD ‘largely compliant’ grading on tax transparency

An independent review conducted by the Organisation for Economic Cooperation and Development has found that Gibraltar’s tax information exchange frameworks are on a par with those of leading western nations including the US, the UK, Germany and Spain.

The peer review by expert assessors of the OECD Global Forum found that Gibraltar was “largely compliant” with OECD benchmarks on tax transparency, the same rating major economies around the globe and the second-highest in the OECD’s ranking.

The assessors reviewed Gibraltar following an initial inspection in 2014, which also graded the Rock as “largely compliant” with OECD criteria.

The assessors nonetheless made a number of recommendations relating to the legal framework for effective and accurate supervision of information on beneficial ownership, and to strengthen mechanisms for supervision of accounting records and underlying documents.

The assessors also recommended additional staffing resources to ensure the timely and effective exchange of information.

Overall though, the report bolsters Gibraltar’s commitment to strict adherence to international rules on tax transparency.

“The Gibraltar competent authorities’ labour-intensive but accomplished task has in no small measure contributed over the years to further consolidating Gibraltar’s solid reputation as an internationally-cooperative jurisdiction, notably in terms of transparency and the exchange of information for tax purposes” said Fabian Picardo, Chief Minister and Minister with responsibility for finance and the international exchange of information.

Albert Isola, the Minister for Financial Services, echoed the Chief Minister’s comments and added: “This report confirms the findings of 2014, that Gibraltar is ‘Largely Compliant’, on a par with four major nations, that I am very pleased with and we should all be proud of,” said Minister Isola.

The latest review included an onsite visit to Gibraltar by a Global Forum assessment team in 2019.

In accordance with the Peer Review Methodology, expert assessors are tax officials drawn from tax authorities of OECD Global Forum member jurisdictions with “substantial relevant experience of transparency and exchange of information for tax purposes, including relevant practical experience”.

They found that Gibraltar has in place the legal and regulatory framework to give effect to its exchange of information mechanisms and a very wide treaty network covering all relevant partners.

Gibraltar’s response to the Second Round Peer Review assessment, including a series of meetings with public bodies and industry associations during the onsite visit to Gibraltar by the assessment team in 2019, was coordinated by the Income Tax Office and the Finance Centre Department.

According to the OECD Global Forum’s Methodology, for exchange of information to be effective a jurisdiction should have appropriate international exchange mechanisms in place with all relevant partners and it must ensure that the information sought is available and accessible to its competent authority.

The reviews are driven by peer jurisdictions. Hence, during the ‘peer reviews’ Global Forum member countries and territories are requested to provide feedback regarding their exchange of information experience with the assessed jurisdiction.

The areas of investigation considered by the assessment team included:

- The degree to which in practice information is maintained and by whom, including the oversight and enforcement activities applied to those persons who are obliged to maintain information;

- The practical application of compulsory powers to obtain information;

- The timeliness of responses in relation to different types of requests for information e.g. ownership, accounting, banking and other information;

- The quality and completeness of EOI responses provided, based on EOI partners’ feedback on the quality of the responses provided by the assessed jurisdiction;

- The comprehensiveness of the jurisdiction’s exchange of information programme such as the tools and processes that have been implemented in the jurisdiction for the processing of exchange of information requests;

- The adequacy of the organisational structure and resources having regard to the exchange of information demands made on the jurisdiction;

- The practical application of the jurisdiction’s rules regarding the confidentiality of information exchanged.

Mr Picardo thanked the Gibraltar competent authorities (Finance Centre Department and Income Tax Office) for their hard work over the past ten years, dealing with hundreds of requests for information from partner countries.