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Offshore Tax Planning: New BNAI Report
Highlights Key Role of Offshore Financial Centres in Global Economy

NEWS RELEASE

Contact: Nick Gallehawk + 44 207 559 4802/ngalleha@bna.com

London (November 22, 2006) -- Offshore financial centres play a key role as suppliers of essential services to the world's capital and commercial markets, according to Offshore Tax Planning, a new special report from BNA International.

Offshore Tax Planning is an examination of sixteen of the world's leading offshore jurisdictions, in which the diversity of the jurisdictions highlights the sheer breadth of the offshore world. Included in the examination are some leading financial centres (Singapore, Switzerland and Hong Kong, the "gateway to China"); new E.U. Member states (Cyprus and Malta); and many of the islands traditionally associated with the term "offshore" (Cayman Islands, Bermuda, BVI, Netherlands Antilles, Jersey, Guernsey, Isle of Man and Gibraltar.)

While tax authorities in developed countries tend to stand in opposition to the activities of offshore financial centres, those centres play a crucial role in oiling the wheels of capitalism by facilitating efficient access to the capital markets.

According to contributing author Steve Edge, a well-respected tax partner with Slaughter & May in London, tax authorities need to take a balanced view of the role of offshore tax havens: "Developed countries need to balance their understandable desire to increase tax yield against the dangers of discouraging inward investment and/or losing their multinational champions as a result of ceasing to be competitive. Offshore financial centers generate competition within the world of capitalism – and that must ultimately be to the good. Any developed jurisdiction that seeks to outlaw such activities does so at its peril."

Examples of the many benefits produced by the offshore markets include the use of captives that go direct to cheaper wholesale insurance or reinsurance markets, free of the regulatory pressures that would be involved in establishing an insurance company at home; fund management in an environment that enables investment and income and gains to flow through to ultimate investors with no intermediate tax friction; and the bringing together of individual investors to provide the considerable firepower that the private equity and hedge funds are able to bring to bear.

Offshore Tax Planning also gives an overview of recent developments from the Organisation for Economic Co-operation and Development (OECD), an organization formed in1961 to assist governments in tackling the economic, social, and governance challenges of a globalised economy. At stake in the current OECD project is the whole future of financial services, which generates $2 trillion a year in revenue and which is expected to triple in value by 2020 and so account for ten percent of worldwide GDP.

Richard Hay, another contributing author and a partner at the London firm Stikeman Elliott, stresses the importance of the OECD project. "The current stand-off on tax information exchange between OECD and the smaller offshore jurisdictions has profound implications for the trillion dollar offshore financial services industry and the economies of the jurisdictions that participate in it."

Hay and others cited in the special report believe this adversarial situation is counterproductive, and that governments need to come to terms with the role played by the offshore industry, if only to be in a better position to regulate consistency in the quality of the financial products they produce. Says Hay: "The risks for all posed by potential variance between the best and worst outcomes for the financial services business in the offshore centres have never been greater."

Working press may request a review copy. Contact: Nick Gallehawk, BNA International, 29 th Floor, Millbank Tower, 21 – 24 Millbank, London SW1P 4QP, UK. Telephone + 44 207 559 4802. Fax: + 44 207 559 4840. Email: ngalleha@bna.com . Website: www.bnai.com

Publication Date: November 2006. Pages: 120. Price: £145/$265/205 euros

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About BNA International

BNA International's services help companies and their advisers operate successfully in global business, providing accurate news and analysis of worldwide legal developments in areas including international tax, IP & Communications and Business & Finance. It is the London-based subsidiary of BNA (www.bna.com ), the largest independent U.S. publisher of news and information for professionals in business, law, tax, and government.