Channel Islands Heighten Policy Cooperation

by Amanda Banks, Tax-News.com, London

29 March 2010

The Channel Islands, Guernsey and Jersey, are discussing the possibility of opening an office in Brussels, to be funded on a joint basis, to increase the representation of the islands to the European community.

The announcement comes amid fears surrounding the future of the islands’ zero/ten corporate tax regimes, which the islands expect will have to be again revised to conform to changes in the EU Code of Conduct on Business Taxation. The tax regimes of transparent international financial centers are being revised after increased international scrutiny of so-called ‘tax havens’, stemming from the G20’s April 2 meeting.

Making the announcement, the Guernsey government said: “Guernsey and Jersey already use the same firm in Brussels to provide advice on a very wide range of issues and it is therefore sensible to continue this cooperation and evaluate the options and benefits of extended representation in Brussels.”

“It is normal for Member States, their regions and third countries to have a permanent representation in Brussels and the EU is a very important international entity which has a significant impact on the many issues that affect the Channel Islands. These include trade in agriculture and other goods, air transport, EU and European issues that impact on Financial Services.”

In October 2009, when the Channel Islands voiced their concern over the future of their corporate income tax regimes, Jersey’s Chief Minister Terry Le Sueur, after meetings with his Guernsey counterpart, agreed that cooperation between the two islands would increase considerably.

Discussing the possible implications of changing attitudes towards business taxation in the European Union, Le Sueur, at the time, said: “I am fully committed to ensuring Jersey’s regulatory standards and tax structures remain compliant with emerging global attitudes and standards. We have already announced a comprehensive review of our fiscal strategy, and we are pleased to announce that the Treasury Ministers of Jersey and Guernsey have decided to work closely together on this.”

“Our meeting yesterday was very helpful. It is a very positive step that the two islands will now be working together,” he added

In a later meeting in mid-November, the governments confirmed they would work together "to counter the threats to the economic prosperity of the Channel Islands." Ministers have agreed a political framework that will allow officers to develop joint policy responses to safeguard the interests of all islanders.

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