Channel Islands consult on ending zero-ten corporation tax

24 June 2010

Guernsey and Jersey have launched public consultations on the coming reform of their corporate taxation policies.

Both dependencies, and the Isle of Man, were last year told by the UK Treasury that they cannot continue to operate their existing "zero-ten" tax systems, under which most companies pay no corporation tax.

European Union member states regard the zero-ten system as "unfair tax competition".

An official EU Code of Conduct Group review of the crown dependencies' tax systems is to be conducted this autumn, although Guernsey believes it has escaped imminent scrutiny.

The dependencies' Treasury Ministers are now trying to assess what impact any future changes would have on their jurisdictions as places to do business.

The deadline for comments on Jersey's consultation is 30 August; Guernsey’s consultation closes on 27 August. The Isle of Man's public consultation on business taxation was conducted in February.

Guernsey Finance chief executive Peter Niven said the consultation document recognises the importance of tax neutrality to the island’s financial services industry, which he believes will continue to be tax-exempt. This, he said, will ensure Guernsey retains its internationally competitive position in financial services.

 The island's government is expected to make a formal statement during the Budget in December.

Sources

Guernsey Government

Jersey Government

Guernsey Finance

International Adviser

 


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