by Linda Straker
As a result of approving 29 pieces of legislation aimed at facilitating the exchange of information for tax purposes in both the Lower and Upper Houses of Parliament, giving them a date of effect— a recent evaluation by the Global Forum has placed Grenada in the “largely compliant” category.
The rating of the Global Forum is internationally recognised as the gold standard for tax transparency compliance. “This is therefore an important milestone in Grenada’s continued engagement with the international community as a credible, compliant and well regulated international financial centre,” said a news release from the Grenada Authority for the Regulation of Financial Institutions (GARFIN).
The international community through the Organisation for Economic Cooperation and Development (OECD) has launched an initiative to facilitate the exchange of information for tax purposes between contracting jurisdictions. This initiative is aimed at enhancing tax transparency, and the reduction of harmful tax competition among jurisdictions.
“Of the 10 assessed areas in the Phase II review, Grenada was rated ‘fully compliant’ in five areas, ‘largely compliant’ in four and ‘partly compliant’ in one area. Grenada’s rating was negatively affected by its inability to demonstrate effective compliance, as to date Grenada has not received any requests for information under an existing TIEA,” said the release which explained the need for Grenada to had requests.
“Had Grenada received and responded to requests the rating would have been higher. Grenada’s ‘largely compliant’ rating places it on the same rating level as internationally recognised financial services centres such as the United Kingdom, the USA, Bermuda, Cayman Islands, The Bahamas, Germany, Guernsey and Hong Kong,” the release elaborated.
Signing Global Forum compliant treaties was only the first step in the process. The Global Forum then facilitated two assessments of Grenada’s legal, regulatory and administrative infrastructure. The first review, which was an offsite assessment of Grenada’s legal and regulatory framework, occurred during the last quarter of 2011.
The second review, which occurred during the first quarter of 2014, built on the phase I review while concentrating on the administrative arrangements in place for exchange of information. Grenada received an overall rating of ‘largely compliant’ in both reviews.
The operational arm of the OECD for this initiative, the Global Forum, required jurisdictions to sign tax information exchange agreements (TIEAs), at the OECD standard, with their significant trading partners to avoid being placed on a sanctions list. To date, Grenada has signed 29 such treaties, many of which were signed in the last three years.
The findings of the assessment team were endorsed and confirmed by the Global Forum Peer Review Plenary in Paris, France, during the period 15–19 September 2014. Grenada was represented at the Paris plenary by Mr Niguel Streete, Deputy Executive Director of the Grenada Authority for the Regulation of Financial Institutions.