21/03/22

CROWN DEPENDENCIES: Jersey and Guernsey suspend all Russia tax cooperation with immediate effect.

As published on internationalinvestment.net, Friday 18 March, 2022.

The Channel Islands have suspended all forms of tax cooperation with Russia, with immediate effect.

Both Jersey and Guernsey issued separate statements on 17 March in response to a similar announcement by the UK Government.

Jersey, Guernsey and Russia are both parties to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which allows tax authorities to provide assistance to the tax authorities in other jurisdictions.

Jersey's minister for external relations and financial services, Senator Ian Gorst, said: "At a time when Jersey has imposed economic sanctions on Russia, we should not be providing the Russian government with information which it can use to increase its tax revenues. In this we are aligned with the approach taken by the UK Government."

Jersey's minister for treasury and resources, Deputy Susie Pinel, said: "This unprecedented decision reflects the extent to which the Russian government has isolated itself from the global community by its actions in Ukraine. It does not however affect Jersey's commitment to international standards in tax transparency and the exchange of information."

In Guernsey, deputy Mark Helyar, treasury lead for the policy & resources committee said: "The Bailiwick of Guernsey is in lockstep with the UK in respect of measures being applied to Russia. This decision to cease the exchange of tax information is an extension of Guernsey's existing policy."

"The exchange of information for tax purposes is a tool used to combat tax evasion and profit shifting and to risk assess for potential tax avoidance. Suspending the ability for Russia to receive such information from Guernsey ensures that the Russian government cannot use that information to increase its tax revenues. Guernsey's decision is an appropriate part of the international response to the invasion of Ukraine."

He added: Guernsey will, of course, continue to meet all of its other commitments to international standards and agreements on tax transparency and the exchange of information with all other partner jurisdictions."