Global forum on transparency and exchange of information for tax purposes peer reviews. Grenada 2014. Phase 2, Implementation of the standard in practice.

122 Pages·2014·1.639 MB·English

by  OECD

Global Forum on Transparency and Exchange of Information GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
for Tax Purposes
OF INFORMATION FOR TAX PURPOSES
PEER REVIEWS, PHASE 2: GRENADA
This report contains a “Phase 2: Implementation of the Standards in Practice” review, as well
as revised version of the “Phase 1: Legal and Regulatory Framework review” already released
for this country. Peer Review Report
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
Phase 2
multilateral framework within which work in the area of tax transparency and exchange of
information is carried out by over 120 jurisdictions which participate in the work of the
Global Forum on an equal footing. Implementation of the Standard
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the standards of transparency and exchange of information for tax purposes. These in Practice
standards are primarily refl ected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax
Convention on Income and on Capital and its commentary as updated in 2004, which has GRENADA
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been incorporated in the UN Model Tax Convention. e
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The standards provide for international exchange on request of foreseeably relevant r R
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information for the administration or enforcement of the domestic tax laws of a requesting vie
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party. “Fishing expeditions” are not authorised, but all foreseeably relevant information must R
be provided, including bank information and information held by fi duciaries, regardless of the ep
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existence of a domestic tax interest or the application of a dual criminality standard. r
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All members of the Global Forum, as well as jurisdictions identifi ed by the Global Forum as ha
s
relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 e
2
reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange Im
of information, while Phase 2 reviews look at the practical implementation of that framework. p
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Some Global Forum members are undergoing combined – Phase 1 plus Phase 2 – reviews. m
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The ultimate goal is to help jurisdictions to effectively implement the international standards n
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of transparency and exchange of information for tax purposes. tio
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All review reports are published once approved by the Global Forum and they thus represent o
agreed Global Forum reports. f th
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For more information on the work of the Global Forum on Transparency and Exchange of ta
Information for Tax Purposes, and for copies of the published review reports, please visit nd
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www.oecd.org/tax/transparency and www.eoi-tax.org. rd
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Consult this publication on line at http://dx.doi.org/10.1787/9789264223035-en. G
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This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and N
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statistical databases. D
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Visit www.oecd-ilibrary.org for more information.
ISBN 978-92-64-22295-3
9HSTCQE*cccjfd+
23 2014 39 1 P

Global Forum
on Transparency
and Exchange
of Information for Tax
Purposes Peer Reviews:
Grenada 2014
PHASE 2:
IMPLEMENTATION OF THE STANDARD IN PRACTICE
October 2014
(reflecting the legal and regulatory framework
as atAugust 2014)
ThisworkispublishedontheresponsibilityoftheSecretary-GeneraloftheOECD.
Theopinionsexpressedandargumentsemployedhereindonotnecessarilyreflect
theofficialviewsoftheOECDorofthegovernmentsofitsmembercountriesor
thoseoftheGlobalForumonTransparencyandExchangeofInformationforTax
Purposes.
Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusof
orsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersand
boundariesandtothenameofanyterritory,cityorarea.
Pleasecitethispublicationas:
OECD(2014),GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeer
Reviews:Grenada2014:Phase2:ImplementationoftheStandardinPractice,OECDPublishing.
http://dx.doi.org/10.1787/9789264223035-en
ISBN978-92-64-22295-3(print)
ISBN978-92-64-22303-5(PDF)
Series:GlobalForumonTransparencyandExchangeofInformationforTaxPurposesPeerReviews
ISSN2219-4681(print)
ISSN2219-469X(online)
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TABLE OF CONTENTS – 3
Table of Contents
About the Global Forum                                             5
Executive Summary                                                 7
Introduction                                                       11
Information and methodology used for the peer review of Grenada          11
Overview of Grenada                                              12
Compliance with the Standards                                       19
A. Availability of Information                                        19
Overview                                                        19
A1 Ownership and identity information                               21
A2 Accounting records                                            52
A3 Banking information                                           63
B. Access to Information                                            69
Overview                                                        69
B1 Competent Authority’s ability to obtain and provide information        70
B2 Notification requirements and rights and safeguards                  83
C. Exchanging Information                                          87
Overview                                                        87
C1 Exchange-of-information mechanisms                             88
C2 Exchange-of-information mechanisms with all relevant partners        95
C3 Confidentiality                                                97
C4 Rights and safeguards of taxpayers and third parties                  98
C5 Timeliness of responses to requests for information                   99
Summary of Determinations and Factors Underlying Recommendations   105
PEER REVIEW REPORT – PHASE 2 – GRENADA © OECD 2014
4 – TABLE OF CONTENTS
Annex 1: Jurisdiction’s response to the review report                   111
Annex 2: List of all exchange-of-information mechanisms in force         113
Annex 3: List of all laws, regulations and other relevant material         115
Annex 4: People interviewed during the on-site visit                    117
PEER REVIEW REPORT – PHASE 2 – GRENADA © OECD 2014
ABOUT THE GLOBAL FORUM – 5
About the Global Forum
The Global Forum on Transparency and Exchange of Information for
Tax Purposes is the multilateral framework within which work in the area
of tax transparency and exchange of information is carried out by over
120 jurisdictions, which participate in the Global Forum on an equal footing
The Global Forum is charged with in-depth monitoring and peer
review of the implementation of the international standards of transpar-
ency and exchange of information for tax purposes These standards are
primarily reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the
OECD Model Tax Convention on Income and on Capital and its commen-
tary as updated in 2004 The standards have also been incorporated into
the UN Model Tax Convention
The standards provide for international exchange on request of fore-
seeably relevant information for the administration or enforcement of the
domestic tax laws of a requesting party Fishing expeditions are not authorised
but all foreseeably relevant information must be provided, including bank
information and information held by fiduciaries, regardless of the existence
of a domestic tax interest or the application of a dual criminality standard
All members of the Global Forum, as well as jurisdictions identified by
the Global Forum as relevant to its work, are being reviewed This process is
undertaken in two phases Phase 1 reviews assess the quality of a jurisdic-
tion’s legal and regulatory framework for the exchange of information, while
Phase 2 reviews look at the practical implementation of that framework Some
Global Forum members are undergoing combined – Phase 1 and Phase 2 –
reviews The Global Forum has also put in place a process for supplementary
reports to follow-up on recommendations, as well as for the ongoing monitor-
ing of jurisdictions following the conclusion of a review The ultimate goal is
to help jurisdictions to effectively implement the international standards of
transparency and exchange of information for tax purposes
All review reports are published once approved by the Global Forum
and they thus represent agreed Global Forum reports
For more information on the work of the Global Forum on Transparency
and Exchange of Information for Tax Purposes, and for copies of the pub-
lished review reports, please refer to wwwoecdorg/tax/transparency and
wwweoi-taxorg
PEER REVIEW REPORT – PHASE 2 – GRENADA © OECD 2014

ExECUTIVE SUMMARy – 7
Executive Summary
1 This report summarises the legal and regulatory framework for
transparency and exchange of information in Grenada as well as its practical
implementation The international standard, which is set out in the Global
Forum’s Terms of Reference to Monitor and Review Progress Towards
Transparency and Exchange of Information, is concerned with the availability
of relevant information within a jurisdiction, the competent authority’s abil-
ity to gain timely access to that information, and whether that information
can be effectively exchanged with the jurisdiction’s exchange of information
partners The assessment of effectiveness in practice has been performed in
relation to a three year period (July 2010 to June 2013)
2 Grenada is a small island located in the southern Caribbean Sea,
north of Trinidad and Tobago Grenada’s economy mainly relies on agricul-
ture, construction and tourism Its main economic partners are the United
States, other Caribbean jurisdictions and European countries While Grenada
developed an international financial centre, with a peak of almost 4 000 inter-
national companies incorporated in 2002, this sector has downsized since
then and now comprises 66 international companies Although Grenada’s
laws allow for the creation of offshore banks, international insurance com-
panies and international trusts, no such entities are currently registered in
Grenada and Grenada’s government does not intend to re-develop Grenada’s
financial centre unless its legal framework is remodelled
3 Grenada committed to the international standard in 2002 and
renewed this commitment in 2009 Grenada’s network of EOI arrangements
comprises 19 bilateral agreements 17 jurisdictions are covered by a TIEA
(Aruba, Australia, Belgium, Denmark, Faroe Islands, Finland, France,
Germany, Greenland, Iceland, Ireland, the Netherlands, Norway, Poland,
Sweden, the United Kingdom, and the United States) and 2 by a DTC (South
Africa and Switzerland) In addition, Grenada is party to the CARICOM
Treaty, which covers 10 jurisdictions Grenada has therefore 29 EOI relation-
ships, of which 27 are to the standard 1
1 Aruba, Australia, Belgium, Denmark, Faroe Islands, Finland, France, Germany,
Greenland, Iceland, Ireland, the Netherlands, Norway, Poland, Sweden, United
Kingdom, United States and the jurisdictions covered by the CARICOM Agreement
PEER REVIEW REPORT – PHASE 2 – GRENADA © OECD 2014
8 – ExECUTIVE SUMMARy
4 Grenada has introduced the Mutual Exchange of Information on
Taxation Matters Act in November 2011 Under this Act, Grenada’s com-
petent authority, the Comptroller of the Inland Revenue, can ask anyone to
provide any information notwithstanding secrecy provisions contained in
other pieces of existing legislation All treaties signed by Grenada, including
the CARICOM agreement since August 2014 (except the treaty with United
States) are covered by this Act With regard to the treaty with United States,
Grenada has enacted the USA – Grenada Taxes (Information Exchange)
Act that provides for the same collection powers as the Mutual Exchange of
Information on Taxation Matters Act
5 No effect has been given to the DTCs signed with Switzerland and
South Africa as these treaties are not in line with the standard Grenada is
currently under negotiation with South Africa and Switzerland to update the
treaties in line with the standard Grenada should have the powers to access
information in order to respond to a request from all of its treaty partners
6 Availability of ownership information is ensured in Grenada in rela-
tion to domestic companies and international companies External companies
(ie foreign companies) have obligations to make ownership information
available upon registration with the Inland Revenue Domestic companies
are not allowed to issue bearer shares and, although international companies
are allowed to do so, legal requirements ensure that information on holders
of such shares is available Ownership information on partnerships is avail-
able by virtue of information that must be provided to the Inland Revenue
As regards trusts, for both local trusts created under the common law and
international trusts under the International Trusts Act 1996 (CAP 152),
ownership information should be available in Grenada due to the common
law obligations and in some instances due to anti-money laundering require-
ments It was noted during the Phase 2 review that Grenada does not have
an oversight programme to verify that obligations to maintain ownership
and identification information are respected by companies and professionals
(pursuant to the AML obligations) It is therefore recommended that Grenada
put in place such oversight programmes In addition, the oversight pro-
gramme to verify that international companies comply with their obligation
under the International Companies Act is very recent and should therefore be
monitored
7 Obligations to maintain accounting records including underlying
documentation for a minimum of five years in compliance with the standard
are in place in respect of all entities and arrangements that can be created
under Grenada’s laws
8 Bank information is made available under Grenada’s anti-money
laundering legal framework With regard to bank and other financial institu-
tions, whilst the legal requirements to maintain information is in place, the
PEER REVIEW REPORT – PHASE 2 – GRENADA © OECD 2014