The Netherlands has added Guernsey and Jersey to its new tax evasion blacklist.
The Dutch finance ministry added the islands along with 14 other low-tax jurisdictions, making its blacklist now bigger than the EU's own list.
It'll mean companies which are registered here and operate in the Netherlands will face a number of measures, including paying 20.5 per cent tax on interest and royalties received from The Netherlands from 2021.
The ministry says it's just one of the tough measures the country is taking to tackle tax evasion.
Guernsey's Chief Minister says the move is 'disappointing' and says the island has been rated as fully compliant against international standards. In a statement he said:
We are confident that Guernsey’s new legal substance requirement is a proportionate and effective response to the concerns raised and will receive a positive assessment by the EU. The EU screening exercise in 2017 looked at principles of tax transparency, fair taxation and compliance with the OECD’s anti-BEPs initiative. Whilst it is disappointing that the Netherlands have copied a number of other places and gone beyond the EU’s own listing exercise, by adopting a list that includes jurisdictions on the basis of the rate of corporate tax alone, specifically those lower than 9%, it is recognised that it is its sovereign right to do so. Such a reliance on tax rates only does not take into account transparency. Guernsey was rated as fully ‘compliant’ by the OECD against the international standards relating to exchange of tax information on request in July last year. This is a rating that exceeds those of some EU Member States including the UK, Germany and Belgium; the Netherlands are yet to be assessed in the second round of peer reviews against the same criteria and currently are still rated as only “largely compliant’ which is a lower assessment than our own. We will of course continue to engage with all interested parties and jurisdictions, including the Netherlands, to ensure they properly understand the important role Guernsey plays in international capital markets and that we are in fact part of the solution, not part of the problem.