State signs accord on tax data with Cayman Islands

THE DOOR was closed on new Ansbacher-style accounts yesterday after Ireland signed a pact with the Cayman Islands to exchange tax information.

The signing in Berlin came as members of the Organisation for Economic Co-Operation and Development (OECD) threatened sanctions against members who fail to comply with the organisation’s regulations on tax and financial transparency.

The Irish-Cayman tax information exchange agreement (TIEA), similar to recent deals signed with Jersey, Guernsey and the Isle of Man, allows the Revenue to request data and company ownership information arising from tax investigations after May 2009.

Minister of State at the Department of Finance Martin Mansergh said a similar deal with Gibraltar was pending. “We’ve been trying to get a deal like this for 10 years but single countries, even large countries, have limited clout on their own,” he said.

The agreement with the Cayman Islands, classified as a tax haven by the OECD would, he said, makes it unlikely that Ireland would see a repeat of the Ansbacher tax evasion scandal.

“The Ansbacher investigation involved . . . limited co-operation. This signing means that this type of thing is no longer likely,” said Dr Mansergh.

The battle to take on tax havens worldwide has moved quickly since last October’s OECD conference on tax evasion in Paris, when German foreign minister Peer Steinbrück urged “carrot and stick” measures to force compliance. The G20 meeting in April bolstered these efforts, with a request for the OECD to prepare a “grey list” of “non-co-operative jurisdictions”.

The prospect of being named as “non-co-operative jurisdictions” in the final list – and the consequences for their reputation as financial centres – has prompted promises to fall into line from Switzerland to the Cayman Islands.

Many have loosened their banking secrecy laws and over 40 TIEAs have been signed since then. “I think we have made more progress in the last three months than we had made in the 10 years before that,” said OECD secretary general Angel Gurria.