Good news for 11 Low-Tax Jurisdictions

Explaining OECD’s Substantial Activities Standards
OECD published its Substantial Activities Standard in November 2018 for those countries where no tax is charged, or where tax is very low. It was then down to the 12 countries on the Harmful Tax Practices list to ensure that they complied with these new regulations before the beginning of 2019.Most pushed through the legislation before the end of 2018 although some processed the final changes in the first half of 2019.
To satisfy the OECD and their requirements, certain highly mobile business sector activities were required to ensure that core income-generation took place within the jurisdiction where it is located. Other measures required that the activity employed qualified personnel.
What Are the 12 Jurisdictions? Which Has Not Yet Complied?
11 of the 12 jurisdictions that were on the list have now complied. They are: Guernsey, Isle of Man, Jersey in northern Europe, Anguilla; the Bahamas, the Turks and Caicos Islands, Barbados, Bermuda, the British Virgin Islands, the Cayman Islands all in Central America and The Caribbean. In the Middle East, Bahrain makes up the 11th.The final country on the list is the United Arab Emirates. The only reason it has not yet fully complied is legislative technical points. OECD says that the law is presently being amended and expecting removal from the list shortly.
2020 Measures In Place
From next year, OECD Forum will begin monitoring the effectiveness of jurisdiction’s legislative frameworks to ensure continued and ongoing compliance.Finally, OECD’s report studied so-called “preferential tax” measures in these jurisdictions which could prove harmful elsewhere. Most measures that were deemed highlighted as potentially harmful have either been abolished, altered, or were never operational in practice. OECD also examined other measures and found they were not harmful as initially believed.
Only in one instance were such measures highlighted as actually harmful. That was the development zone that the country Jordan operates. 21 other jurisdictions where placed into the OECD review system.
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