On the 23rd of June 2018 Vanuatu’s Minister for Finance and Economic Management Gaetan Pikioune, signed the Convention on Mutual Administrative Assistance in tax matters in Paris before he travelled to Brussels to deposit the instrument of accession to the International Convention on the Simplification and Harmonization of Customs Procedures (Revised Kyoto Convention (RKC) on the 30th of June 2018.
This Convention is a key step forward for Vanuatu as a member of the Organisation of Economic Corporation and Development (OECD) Global Forum on Exchange of Information for Tax purposes (the Global Forum).
The Minister of Finance signed the Convention at the office of the Secretary General of the OECD in Paris, (France). The Convention is expected to come into effect in July 2018.
Vanuatu has significantly improved its commitments with the Global Forum when signing the convention and this is one big commitment that being a member of the global forum, each jurisdiction needs to fulfill, according to the official statement.
Vanuatu’s Exchange of information rules and procedures will be established under one legal framework and should make tax administration simpler and more flexible. In addition, the additional assistance afforded under the Convention will provide for a wider range of assistance under the current TIEAs.
OECD commitments are also linked with the Anti Money laundering (AML) and Counter Terrorism Financing (CTF) commitments that Vanuatu is currently committed to in order to have the instruments in placed.
Vanuatu will be able to use the Convention to seek to enforce our tax laws (such as VAT) and collect debts from expatriate business owners who flee Vanuatu with unpaid tax debts. This is potentially a significant benefit to our revenue administration.
The Minister explained that “signing the Convention is an important step forward for Vanuatu. It will allow Vanuatu to meet its obligations to help fight global tax evasion”.