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The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard. The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

Peer Review: Sint Maarten Phase 2 Report

This report for Sint Maarten has been published on 3 Aug 2015. You can buy this report, or browse it online below.

Skip directly to the Executive Summary. You may also want to view the tables of determinations and ratings.


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Determinations and Recommendations

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Partially Compliant.   Sint Maarten does not have an effective system of oversight in place to monitor and enforce the compliance of relevant entities with obligations to maintain or provide ownership and identity information. This is of particular concern with regards offshore companies  Sint Maarten should put in place a system of oversight to ensure compliance with the obligations to maintain or provide ownership information for all relevant entities to ensure that information is available in practice.  
There is limited oversight of a policy prohibiting a company that can issue bearer shares from obtaining a business license and there are no mechanisms to identify owners of bearer shares of NVs which issued bearer shares but do not conduct business in Sint Maarten or do not engage a TSP there.   Sint Maarten should introduce measures to ensure that the identity of all legal owners of NVs which issued bearer shares is known there in all cases. 
Sint Maarten has recently introduced new legislation pertaining to the keeping of ownership information for trusts, partnerships and foundations. Since this legislation is recent it has not been sufficiently tested in practice.   Sint Maarten should monitor the operation of the new legislation in practice. 
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Partially Compliant.   The system of oversight of accounting obligations is limited to tax supervision however compliance with tax obligations remains relatively low and no efficient enforcement measures were taken. Although the number of offshore companies in Sint Maarten is small and there is oversight of those that have engaged a TSP, it cannot be determined whether accounting information is actually available in respect of the remainder of these companies.   Sint Maarten should put in place an efficient system of oversight and enforcement to ensure compliance with the obligations to maintain accounting information in accordance with its law. Sint Maarten should take measures to ensure that accounting information in respect of offshore companies is available in all instances.  
Banking information should be available for all account-holders. (ToR A.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Partially Compliant.   Sint Maarten received three requests for banking information over the period under review and of them, one is still pending for more than a year due to obstacles in obtaining the requested information from the bank.  Sint Maarten should use the compulsory powers of the tax authority more effectively so that the requested information is provided in a timely manner. 
The practical application of legal professional privilege in Sint Maarten appears to go beyond that defined in the international standard, however, it remains to be tested in respect of obtaining information for exchange of information purposes.   Sint Maarten should monitor the practical application of legal professional privilege to ensure that it does not prevent effective exchange of information.  
There has been no case during the period under review where the requested information related to an offshore company and therefore the relation between the obligation to provide the information for exchange of information purposes and the grandfathering clause granting exception from providing the information to the tax authority remains untested. However, there is a risk that the grandfathering provisions would obstruct the access powers of Sint Maarten for exchange of information purposes.  Sint Maarten should monitor the use of the access powers in respect of the offshore entities and if necessary take measures to ensure that the requested information can be obtained from them. 
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2)
Determination Factors Recommendations
The element is in place, but certain aspects of the legal implementation of the element need improvement.   Appeals to Council of Appeal, which meets only twice a year, may delay the effective exchange of information in Sint Maarten.  Sint Maarten is encouraged to proceed with the intended change of the judicial procedural to allow an appeal to the judge in administrative law. 
The power of the Sint Maarten’s tax authorities to promptly provide information for exchange purposes is subject to interpretation issues (namely, the minimum two-month waiting period and the definition of urgent reasons) that could prevent effective exchange of information within reasonable time.   Sint Maarten is encouraged to proceed with the intended change of its procedural framework to reduce the conditions and timelines in which information can be provided in response to a request for information. 
The prior notification procedure only allows for an exception in case of urgent reasons.  It is recommended that wider exceptions from prior notification be permitted in tax matters (e.g. in cases in which the notification is likely to undermine the chance of the success of the investigation conducted by the requesting jurisdiction). 
Phase 2 Rating Factors Recommendations
Largely Compliant.      
   
   
Exchange of information mechanisms should provide for effective exchange of information. (ToR C.1)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
The jurisdictions' network of information exchange mechanisms should cover all relevant partners. (ToR C.2)
Determination Factors Recommendations
The element is in place.     Sint Maarten should continue to develop its EOI network with all relevant partners. 
Phase 2 Rating Factors Recommendations
Compliant.      
The jurisdictions' mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4)
Determination Factors Recommendations
The element is in place.      
Phase 2 Rating Factors Recommendations
Compliant.      
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5)
Determination Factors Recommendations
The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.      
Phase 2 Rating Factors Recommendations
Partially Compliant.   Sint Maarten provided the requested information within 90 days in 6% of cases and within 180 days in 31% of cases over the reviewed period. Long response times were also noted by peers.   Sint Maarten should ensure that internal deadlines for obtaining and providing the requested information are respected to enable it to respond to EOI requests in a timely manner. 
During the period under review, Sint Maarten did not systematically provide status updates to EOI partners within 90 days.   Sint Maarten should ensure it provides status updates to EOI partners within 90 days when it is unable to provide a substantive response within that time. 
In September 2014, the Tax Administration adopted a new EOI manual setting out exchange of information procedures, checklists and templates providing for effective exchange of information.   Sint Maarten should implement the exchange of information manual and, if necessary, take measures to ensure that adequate resources are allocated to EOI.