Guernsey is to finalise an agreement on its tax package with the UK to reinforce its position as tax-transparent and sustainable jurisdiction.

In the latest development to combat tax evasion, Guernsey is the second crown dependency after the Isle of Man to sign a package with the UK government.

The proposed deal is to enhance the reporting of tax information along FATCA principles through an Intergovernmental Agreement (‘IGA’), with alternative reporting arrangements for non-domiciled UK tax residents. Non-domiciles will have to negotiate a revised Double Taxation Agreement and agree on a disclosure facility.

The UK deal will complete previous intergovernmental agreements with the US on FATCA and with the European Union to declare interest on payments as part of the EU Savings Directive.

"Guernsey is fully committed to combating tax evasion and the principle of automatic exchange and our twin IGA approach to US/UK reporting will provide our industry with a very strong platform to compete on the world stage against weaker, less transparent and compliant jurisdictions," says Guernsey’s chief minister deputy, Peter Harwood.

"With such a UK agreement, automatic exchange under the EU Savings Directive and importantly an IGA arrangement with the US for FATCA now almost concluded, we believe Guernsey business will have both certainty and a competitive advantage."

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As Guernsey and the Isle of Man are taking significative steps to amend their tax system, all eyes are turned on Jersey to follow the movement.