Jan Kees de Jager, Dutch Deputy Finance Minister, confirmed on October 31st that the Netherland’s Government had signed an agreement which delivers a list of names, account numbers and addresses of several hundred tax evaders, or “black savers” as dubbed by the Dutch government.

According to the Deputy Finance Minister, negotiations with the informant were initiated earlier this year, with an agreement being signed on September 16th. Reliability of the information has already been tested and the legal basis for utilizing the data has already been approved by government lawyers. It has been confirmed by the Dutch government that the informant will be compensated based on the amount of tax liability that they are able to recover. Although, it has already been stated that the payment is capped at “several hundred thousand euros”. The name and nationality of the tipster has also been suppressed by authorities.

The list allegedly contains information regarding offshore accounts with totals averaging €200,000. The largest account is reputed to hold “tens of millions of euros”. Switzerland and the Cayman Islands are the most popular destinations on the list, though Luxemburg and Liechtenstein also harbor some tax evaders.

In the face of a KYD40.8 million fall in revenues and a KYD56.2 million escalations in expenditure, the Cayman Islands government had sought assistance in the form of loans. Permission to increase the British jurisdiction’s debt balance was denied by the British government. It was requested that the Cayman Islands increase their tax base or levels to ensure that it does not post a budget deficit in the following fiscal year. With the new budget, permission has been given for the Cayman Islands to pursue and accept rescue loans.

It is estimated by the Cayman Islands government that the new revenue measures will garner KYD94.9 million in the 2009/10 fiscal year and KYD126.4 when they have been in effect for a full twelve months. The most prominent changes implemented include raising annual company fees for resident, non-resident, exempt and foreign companies by KYD150 – KYD500. Even with a subsequent reduction in companies, the government still estimates that an additional KYD17.0 million will be collected. License fees for Mutual Funds are set to increase by KYD500, garnering KYD4.4 million. The full list of changes and their revenue estimates can be found at the Cayman Islands government website.

The London G20 Summit, held on the 2nd of April this year, heralded an unprecedented wave of Tax Information Exchange Agreement (TIEA). In what was described as “revolutionary” by Angel Gurría, OECD Secretary-General, the number of completed TIEAs has almost doubled since their inception in late 2000.
Since the G20 summit, and subsequent global push for greater tax transparency and compliance, the following 53 agreements have been signed.

United States – Monaco (8 September 2009)
Denmark – Turks & Caicos Islands (7 September 2009)
Netherlands – Antigua & Barbuda (2 September 2009)
Denmark – Gibraltar (2 September 2009)
Denmark – Anguilla (2 September 2009)
Germany – Liechtenstein (2 September 2009)
Netherlands – St Vincent & the Grenadines (1 September 2009)
Denmark – St Vincent & Grenadines (1 September 2009)
Denmark – St Kitts & Nevis (1 September 2009)
Netherlands – St Kitts & Nevis (1 September 2009)
Canada – Netherlands Antilles (29 August 2009)
United Kingdom – Gibraltar (27 August 2009)
Australia – Gibraltar (25 August 2009)
New Zealand – British Virgin Islands (14 August 2009)
New Zealand – Cayman Islands (14 August 2009)
New Zealand – Gibraltar (13 August 2009)
Germany – Gibraltar (13 August 2009)
United Kingdom – Liechtenstein (11 August 2009)
Monaco – San Marino (29 July 2009)
Bermuda – Ireland (28 July 2009)
New Zealand – Isle of Man (27 July 2009)
New Zealand – Jersey (27 July 2009)
United Kingdom – Turks & Caicos (23 July 2009)
Netherlands – Turks & Caicos (22 July 2009)
Netherlands – Anguilla (22 July 2009)
Ireland – Turks & Caicos (22 July 2009)
Ireland – Anguilla (22 July 2009)
New Zealand – Guernsey (21 July 2009)
UK – Anguilla (20 July 2009)
Belgium – Monaco (15 July 2009)
New Zealand – Cook Islands (9 July 2009)
Netherlands – Cayman Islands (8 July 2009)
Germany – Bermuda (3 July 2009)
Ireland – Gibraltar (24 June 2009)
Ireland – Cayman Islands (23 June 2009)
France – British Virgin Islands (17 June 09)
Australia – Jersey (10 June 2009)
The Netherlands – Bermuda (8 June 2009)
Denmark – British Virgin Islands (19 May 2009)
Faroes – British Virgin Islands (19 May 2009)
Finland – British Virgin Islands (19 May 2009)
Greenland – British Virgin Islands (19 May 2009)
Iceland – British Virgin Islands (19 May 2009)
Norway – British Virgin Islands (19 May 2009)
Sweden – British Virgin Islands (19 May 2009)
New Zealand – Bermuda (17 April 2009)
Denmark – Bermuda (16 April 2009)
Faroes – Bermuda (16 April 2009)
Finland – Bermuda (16 April 2009)
Greenland – Bermuda (16 April 2009)
Iceland – Bermuda (16 April 2009)
Norway – Bermuda (16 April 2009)
Sweden – Bermuda (16 April 2009)

Previous to these, 63 agreements had been signed, bringing the total at the 10th of September to 116.

The Cayman Islands, which are undergoing a severe governmental budget deficit, are being encouraged to introduce taxes to its system by the British Government. Facing a budget deficit of US$82, the island nation has sought out loans to meet its financial obligations, such as pension and government worker payments. As it is a British Overseas Territory, the Cayman Islands require British Government approval before increasing their borrowing beyond 80% of its annual revenue.

In a letter dated the 27th of August addressed to McKeeva Bush, leader of the Cayman government,Chris Bryant, British Foreign Office Minister, denied the Cayman Islands permission to expand their borrowing limit and pursue the estimated US$310 million in loans that they required. The Cayman Islands government already had offers for US$275 million of loans from three international banks.

The letter also said “I fear you will have no choice but to consider new taxes – perhaps payroll and property taxes such as those in the British Virgin Islands,” it continued to say “I understand, of course, that in so doing you will want to consider carefully the implications for Caymans’ economy, including the financial services industry.”

On the 2nd of September Governmental spokespeople for the Cayman Islands announced that they have been working on an official reply to the letter. In response to the denied loan increase and suggestion of introduction of direct taxes, McKeeve Bush said “We will either need to make aggressive cuts in either jobs or work hours for civil servants as well as raise indirect taxes, or we will need to focus on the areas where we can secure the revenues without harming our economy and our quality of life.”

The Cayman Islands and New Zealand signed a Tax Information Exchange Agreement (TIEA) on the 13th of August. This agreement brings the total for the Cayman Islands to twelve, enough to be considered by Organization for Economic Co-Operation and Development to be part of the jurisdictions that have substantially implemented the internationally agreed tax standards, otherwise known as the “OECD White List”.

The announcement came on the same day as news of the British Virgin Islands also reaching white list status. Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, welcoming the development said, “Today the British Virgin Islands and the Cayman Islands take their place alongside other countries that have substantially implemented the internationally agreed tax standard. Six jurisdictions have moved into this category since April. We look forward to working further with the British Virgin Islands and Cayman Islands as they extend their network of agreements and work to swiftly and effectively implement them.”

The Honourable McKeeva Bush, Leader of Government Business/Premier Designate for the Cayman Islands, stated “The Cayman Islands Government sees the OECD’s recognition as a natural outcome of the country’s substantial commitment to uphold an equally world-class international cooperation regime in the exchange of tax information.”

Prior to the signing, the Cayman Islands held TIEAs with Denmark, Faroe Islands, Finland, Greenland, Iceland, Ireland, Netherlands, Norway, Sweden, UK and US.