On March 18th the Organization for Economic Cooperation and Development (OECD) announced the initiation of the first step in the most extensive and through international tax transparency assesment process that has ever been undertaken. Eighteen nations from the 91 participating members of the Global Forum on Transparency and Exchange of Information will soon undergo extensive analysis to determine the adequacy of their efforts to implement internationally agreed upon taxation standards, such as the effectiveness of the bilateral Tax Information Exchange Agreements (TIEA) which were signed by all participating jurisdictions. The first set assessment results are expected to be published before the next Global Forum meeting to be held in Singapore in September 2010. The eighteen reviewed nations will consist of Australia, Barbados, Bermuda, Botswana, Canada, Cayman Islands, Denmark, Germany, India, Ireland, Jamaica, Jersey, Mauritius, Monaco, Norway, Panama, Qatar and Trinidad & Tobago.

The peer-reviews come as a response to calls raised by G20 leaders at their Pittsburgh Summit in September 2009 for greater tax transparency and a “robust peer review mechanism” to ensure the rapid, timely and appropriate implementation of the OECD standard on information exchange. Mike Rawson, Chair of the Global Forum, commented on the upcoming reviews, saying: “…this is the most comprehensive, in-depth review on international tax co-operation ever…The peer review process will identify jurisdictions that are not implementing the standards. These will be provided with guidance on the changes required and a deadline to report back on the improvements they have made.”

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In a media statement released on March 17th, Nick Sherry, Assistant Treasurer of Australia and Senator for Tasmania, announced the introduction of a bill which will make compliance with Australia’s GST laws more affordable and easier. The proposed changes consist of measures which allow entities to self-asses their eligibility to form or change a GST group or joint venture; clarifying rules surrounding entities leaving a GST group or joint venture by allowing for indirect tax sharing agreements; the adoption of general tax ruling system for GST and other indirect taxes administered by the Commissioner of Taxation; and a clarification and simplification of rules surrounding tax invoices.

On March 18th Nick Sherry revealed further changes in a media statement announcing the repeal of numerous aspects of Australia’s taxation legislation in order to ensure higher levels of taxpayer certainty, a core policy goal for the Government. The changes cap the time period for the Commissioner of Taxation to amend a taxpayer’s assessment to a maximum of four years. Prior to the change, the Australian tax laws allowed for an indefinite assessment period. Te finite assessment period will only apply in cases with no suspicion of tax fraud or evasion. Nick Sherry commented on the change, calling it a “great improvement.”

The latest announcement coincided with the release of the Inspector-General of Taxation’s (IGT) Review into Delayed or Changed Australian Taxation Office Views on Significant Issues report, which provided the Australian Tax Office (ATO) with five recommendations aimed at raising taxpayer certainty. The ATO was instructed to conduct an overview on the current tax system and ascertain whether it provides enough transparency for taxpayers. The report also recommended that the ATO clarifies its process of deciding whether new, old or clarified views are applied to a particular case; higher levels of community engagement be sought when altering tax legislation; and reducing the time between the identification of ATO concerns and them being addressed.

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At the recently convened National Taxation Policy and Regulation Working Conference in Shenzhen, Xie Xuezhi, Deputy Administrator of the State Administration of Taxation (SAT), relayed the Chinese Government’s praise to national tax authorities in implementing tax policies and regulations in 2009. He said that in 2010 the Government intends to build upon the progress by implementing five new wide-reaching goals in tax policy implementation.

The new goals consist of sustaining the PRC’s stable and rapid economic development alongside the acceleration of economic restructuring measures; strengthening economic and taxation regulations while making efforts to improve the overall well being of the population; utilizing taxation policy to increase the national economic potential and exploring underutilized sectors; attempting to moderately increase tax revenues while maintain the current levels tax policy restructuring; and, widening the tax base and perfecting the current scope of the tax system.

The PRC Government’s tax policy goals are accompanied by a set of three “transformations” which are mandated to be implemented across all levels of tax authorities and departments in the PRC. The objective of tax authorities will now primarily concentrate on the regulation of tax administration acts, and not on the previous priority of regulating the enforcement of tax laws. In regards to the promotion of tax policy, authorities are now instructed to treat legislation as an overall mechanism with each aspect being part of a greater ensemble, and no longer concentrate on any specific sector of tax legislation. The current system of tax authority internal management, centering on control and restriction, needs to be replaced with a system of precautions, guidance, regulations, supervision and motivation.

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New figures from the BVIs’ Financial Services Commission (FSC) released on March 15th show that annual corporate renewal fees collection rose to more than USD 162.66 million in 2009, compared to USD 156.15 million in 2008. Despite the growing annual government corporate renewal fee collection, new-incorporations fee revenue dropped to USD17.22 million in 2009, compared to USD 22.47 million in 2008. The FSC’s released statistics show that the number of newly incorporated companies has been in decline since 2008. In 2007 77 022 registrations were seen, with each quarter exceeding 17 000 incorporations. The number of incorporations fell to 61 716 in 2008, and only the first quarter experienced registrations above 17 000, at 20 752. 2009 saw 12 307 new incorporations in the first quarter; 9 871 in the second quarter; 13 368 in the third quarter and 11 931 in the fourth quarter. For the first two months of 2010 new incorporation revenue collections were reported to be USD 4.58 million, and USD 10.58 million for annual renewals.

The Virgin Islands Shipping Registry (VISR) reported positive growth, revealing that vessel registrations for the first two months of 2010 had reached 56, compared to 41 for the same time period in 2009. Although the majority registrations were for pleasure vessels, Captain Baboucar Sallah, VISR Director, said, “…the prospects for larger vessels including general cargo ships, which will generate substantial revenue per unit, are good for 2010.”

Regardless of the fall in revenues, Ralph T. O’Neal, BVI Premier and Minister of Finance, said that Government revenues have not being too adversely affected, on account of strong re-registrations. He went on to say “…expectations for the Virgin Islands economy in 2010 are optimistic given the path recovery for the global economy.”

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