Channel Islands Reach E-Commerce Recovery Agreement

by Amanda Banks, Tax-News.com, London

07 September 2001

The Jersey Information Society Commission (JISC) has announced that the UK Crown Dependency Islands of Jersey and Guernsey have reached an accord to offer businesses based in either Island a practical, effective solution to assist with disaster recovery.

The income tax authorities of both Islands have agreed that, if in need of disaster recovery, 'any temporary relocation to the other Island will not cause any tax burdens due to that relocation,' which effectively means that a company which continues to make profit whilst based in the other Island will not be subject to taxation from that Island's tax authority.

Jersey's Comptroller of Income Tax, Malcolm Campbell explained: 'Facing a disaster causes any company a tremendous upheaval and we felt that we did not want to add to this administrative problem by placing a subsequent financial burden on businesses. Additionally, the agreement provides yet another string to our bow in attracting new e-commerce business to the Island.'

The agreement is detailed in each Island's Code of Practice entitled the 'Concession and Practice Booklet.' Although it extends to any type of business, it is particularly important in respect of e-commerce businesses due to the fact that if it becomes necessary to establish a business recovery location in the other Island, not only will they benefit from the no tax rule but they will also be able to make use of the bandwidth running through the inter-Island fibre optic cables.

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