The Chief Ministers of Jersey and Guernsey met the UK Financial Secretary to HM Treasury on October 13. During the meeting, which was held following the annual dinner for Crown Dependencies, the Chief Ministers discussed how the economic crisis is rapidly changing international norms for the regulation of the finance industry and particularly for taxation.
The ministers discussed the possibility that a new business tax regime may be proposed before the EU Code Group has formally considered the zero-ten tax regimes of all the Crown Dependencies. The views of EU Member States seem to be evolving, and it appears that some Member States are increasingly unlikely to accept that the fiscal regimes in the Crown Dependencies are fully compliant with the EU Code of Conduct on Business Taxation.
Following the meeting, Jersey Chief Minister Terry Le Sueur said: “We have worked well, with the UK ’s support, in implementing the zero-ten corporation tax system. It is clear that we will need to continue to work in partnership with the UK on engagement with EU Member States so we can maintain a viable and competitive tax system supported by our European neighbors.”
“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. It will ensure that any changes that may arise from our Fiscal Strategy Reviews are consistent with the EU Code of Conduct on Business Taxation and are in line with our European good neighbor policy.”
Guernsey Chief Minister, Lyndon Trott added: “Our Zero-Ten strategy was always intended to be a multi-stage process, in order to ensure that our tax revenues are sufficiently sustainable in the light of changing economic uncertainties.”
“As a result of the changes in international attitudes, the terms of consultation on this issue will be broader than had previously been envisaged, and will aim, working with the UK and other EU Member States, to ensure that our fiscal regime remains competitive and within international standards.”
Jersey’s Treasury Minister, Senator Philip Ozouf, said: “I am committed to working more closely with Guernsey, so I am particularly pleased that we are now going to cooperate on our fiscal strategy reviews. This means we will be able to share resources and research costs, and approach our European neighbors together. Working in combination will help us to develop strategies that are right for our individual circumstances, but which are also complementary.”
Ozouf concluded: “The unprecedented change in the world economy is leading many countries to re-appraise their tax systems. New international norms for business taxation will evolve, and both Jersey and Guernsey must be ready and able to respond to those changes. We believe conducting a joint Fiscal Strategy Review will help us achieve this.”
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