ST. KITTS AND NEVIS COMMITTED TO INTERNATIONAL STANDARDS ON TRANSPARENCY AND EXCHANGE OF INFORMATION

BASSETERRE, St. Kitts, The Team Unity Government of St. Kitts and Nevis maintains that the twin-island Federation is a committed and fully cooperative jurisdiction in the context of international tax transparency.

This comes as the Federation was one of three Caribbean islands added to the European Union’s (EU) list of non-cooperative jurisdictions for tax purposes earlier today, Tuesday, March 13, 2018. The other two countries listed were The Bahamas and the US Virgin Islands.

In the case of St Kitts and Nevis, the only area of concern from the EU is in respect of: Fair Taxation where (a) a jurisdiction should have no preferential tax measures that could be regarded as harmful and (b) a jurisdiction should not facilitate offshore structures or arrangements aimed at attracting profits which do not reflect real economic activity in the jurisdiction.

In an official response to the EU listing of St. Kitts and Nevis as a non-cooperative jurisdiction, Financial Secretary in the Government of St. Kitts and Nevis, Mrs. Hilary Hazel stated,

“During the process of engaging with the EU, concrete commitments were made by the Federation to amend the relevant legislation to address the EU’s concerns. The Federation remains optimistic that these commitments will persuade EU's partners to remove the Federation from the list of non cooperative jurisdictions for tax purposes and allow for a framework of cooperation and dialogue moving forward.”

In strengthening the case for St. Kitts and Nevis not to be included on the EU’s list of non-cooperative jurisdictions for tax purposes, the Financial Secretary said,

“The Federation remains committed to the international standards on transparency and exchange of information for tax purposes as evidenced by a Largely Compliant rating by the Organization for Economic Co-operation and Development (OECD). Further, Saint Kitts and Nevis has continued to expand its exchange of information network and is a signatory to the Multilateral Convention on Mutual Administrative Assistance for Tax Matters.”

St. Kitts and Nevis signed and deposited the instrument of ratification for the Convention on August 25, 2016.

It was also noted that legislation was passed by the National Assembly in December 2016 to provide for the implementation of the Common Reporting Standards (CRS). The Federation also joined membership of the BEPS Inclusive Framework in November 2017 and is among 112 other jurisdictions that have committed to implementing anti-BEPS measures.

In respect of the commitments specifically given to the EU, Mrs. Hazel noted that

“We anticipate a series of actions to be taken to ensure that Saint Kitts and Nevis addresses the EU’s current concerns within the stipulated timeframe of 31 December 2018. In this regard, Saint Kitts and Nevis will undertake a comprehensive review of its legislation with a view to addressing any deficiencies including amending relevant legislation in accordance with best practice in international tax matters.”

The Financial Secretary also stressed that during the period 2016-2017, important members of the European Union such as Italy, Greece, Poland and Estonia removed St. Kitts and Nevis from their national lists of non-cooperative jurisdictions “signifying their satisfaction with the Federation's efforts on transparency and exchange of information.”