BRADES, Montserrat – Chief Minister Reuben Meade and the FCO Minister for the Overseas Territories, Chris Bryant on Wednesday signed the double taxation arrangement (DTA) which will remove Montserrat from the OECD gray list.
The DTA is designed to avoid the double taxation of income and overrules the domestic tax law of Montserrat. Since 2001, Montserrat was blacklisted by the Organization for Economic Cooperation and Development as a tax haven because there was no mechanism for sharing tax information with the UK.
“Montserrat’s double taxation system dates back to 1946,” explained Violet Silcott, Comptroller at Inland Revenue. “In order for us to be totally removed from the blacklist, it was necessary that the policy be revised.”
Montserrat’s status was shifted to gray after a pledge was made to increase transparency of its tax information procedures. In April, British PM Gordon Brown said sanctions would be imposed on Montserrat, Gibraltar, Anguilla, Bermuda, the BVI, the Cayman Islands and Turks and Caicos Islands if they did not fulfil their pledge. A November deadline was given for the bilateral tax information exchange agreements to be signed.
The UK/Montserrat DTA provides relief for individuals who are tax residents of Montserrat from UK tax on pension income, dividends and royalties. In addition, “the DTA will give individual tax residents of Montserrat relief of personal services performed within the UK if: the individual is present in the UK for a period or periods not exceeding 183 days during that year; and the services are perform for or on behalf of a person resident in Montserrat and the profits or remuneration are subject to Montserrat tax,” according to information from the Inland Revenue Department.
However, persons who are tax residents of Montserrat will be liable to UK tax on income derived from the UK.
The chief minister signed the new protocol at the conclusion of the 11th Overseas Territories Consultative Council meetings in London.