EU Savings Tax Directive Hangs Over Jersey

by Jason Gorringe, Tax-News.com, London

03 April 2002

According to a recent Jersey Finance Industry Association newsletter, the European Union savings tax directive is likely to loom large in forthcoming talks between the Island's Policy and Resources Committee and the UK Treasury.

A final decision on the package of measures - which includes provisions for automatic information exchange on cross-border savings income paid to individuals, and a code of conduct to eliminate 'harmful' tax vehicles such as exempt companies, international business companies, and captive insurance companies - is expected by the end of the year. If adopted, the savings tax directive would take effect in Jersey in January 2004.

However, Jersey Taxation Society President, John Riva, has stressed that the jurisdiction is not making any promises regarding the EU plans. Speaking last week, he explained that:

'Jersey has made it very clear that, although it is willing to enter into dialogue with the UK, it will not introduce any aspect of the package that might compromise its competitive position.'

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