Part 1 - AL-Tax

International Taxation HandbookTable 10.3(Continued)Jurisdiction a,b Status c Population GDP per capita Area(in thousands) (in US$) (square kilometers)Isle of Man DU 76.7 2929.9 572Jersey DU 90.8 5311.6 116Liechtenstein TC 34.2 101,653.8 160Luxembourg MS 459.0 69,423.0 2586Monaco TC 34.9 32,984.1 1Netherlands Antilles DD 180.9 5376.1 800San Marino TC 27.9 44,607.3 61Switzerland TC 7239.7 49,366.6 41,284Turks and Caicos DU 25.2 9923.7 430IslandsAverage 1921.0 33,083.3 11,507Sources: UNCTAD (2006) database and European Commission (2005).a Based on 2004 data.b The United States is not included because it neither shares information with the EU nor does it imposea withholding tax. Gibraltar is counted as part of the UK and Madeira as part of Portugal. Bermuda (UKindependent territory) was accidentally missed out by the EU.c The following labels are used: EU member state (MS), Third country (TC), Dutch dependency (DD), and UKdependency (DU).(because third countries are not part of the European Union, no reciprocal agreementapplies). Not all DA territories consider this of particular importance; ThreeDA territories – that is, Anguilla, Cayman Islands, and Turks and Caicos Islands –do not have a reciprocal effect because residents’ savings income is not taxed.The second innovative feature of the savings tax directive concerns the revenuesharingrule: Jurisdictions operating a withholding tax will transfer 75% of therevenue that they collect to the investor’s country of residence. Besides beingable to keep 25% of the revenue, those jurisdictions will get valuable informationfrom EU partners on their residents’ foreign savings income. This applies to allthree EU countries in the transitional regime and DA territories that apply a withholdingtax combined with a reciprocity agreement. The rationale for the revenuesharingrule is the notion that the ‘rights’ to the revenue – after subtraction of acompensation for the administrative and collection costs – should, in line with theresidence principle, accrue to the residence country.Table 10.3 shows the 40 jurisdictions participating in the EU savings tax classifiedby the regime of savings taxation. Information sharing is the dominant256