Guernsey Confirms Corporate Tax Changes

by Jason Gorringe, Tax-News.com, London

14 December 2010

Guernsey’s Treasury Minister, Charles Parkinson has confirmed that the island is to put into motion plans to amend the island’s corporate tax regime ahead of the publication of the findings of a European Union high level working group – currently reviewing the similar tax regimes of neighbouring Jersey, and the Isle of Man – with the issue of a green paper, outlining proposals, in the first six months of 2011, for implementation as early as 2012.

A representative of the Guernsey government on December 10 confirmed Parkinson's statement, made to the UK national broadcaster, the BBC, that there would be a change to the island's zero-ten regime, in line with the stated preference given in its consultation document for a “move towards a territorial system of taxation with a 10% headline rate.”

This however, the representative and Parkinson confirmed, would not jeopardize existing exemptions in particular for tax exempt funds and the tax capping of individuals.

The representative confirmed that a green paper is to be published within the first six months of 2011, for implementation in 2012 or 2013 after the necessary legislation is in place, and after further consultation with stakeholders.

In a statement obtained by Guernsey local paper, Channel Online TV, the UK Treasury welcomed the government's decision, stating: “Although Guernsey operates a Zero-Ten Corporate Tax regime similar to those operated by Jersey and the Isle of Man, its regime is not being assessed as Guernsey was deemed by the Group to have made a strong enough public commitment to move away from its current regime. The UK is supportive of Guernsey's efforts to move towards a normal, internationally acceptable business tax regime."

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