A report from Guernsey’s Policy Council, supported in a vote by States members this week, has said that in all probability the island will have to accept an increase in the general corporate tax to 10%.
“While no clear direction at this stage has been provided by HM Treasury [in the UK], it is believed that that a movement from a limited to general corporate tax rate of at least 10% is the likeliest route to achieve such support and success, as 10% is the lowest general rate of corporate tax within the EU," explained the report.
The report added that during a recent series of meetings between representatives of the States of Guernsey and HM Treasury it was communicated that that the EU Code of Conduct Group now considers the 'Zero-10' corporate tax regime of the Crown Dependencies to be non-compliant with the "spirit" of the European Union (EU) Code of Conduct for business taxation.
The Treasury went on to advise that the Crown Dependencies would need to review general corporate tax rates to comply with the Code not just technically, but with the "spirit" of the Code.
Zero-10 was introduced in Guernsey in January 2008, and the report makes it clear that the UK Treasury had confirmed that the general approach was compliant with international standards and the EU Code of Conduct. Previous indications from the Code of Conduct Group were that Zero-10 would be deemed compliant.
The Policy Council blamed the unprecedented global economic turbulence of the last 12-18 months and the significant deterioration of the fiscal position of many European countries for the ruling that the Zero-10 regime is no longer compliant with the spirit of the Code.
In reviewing corporate tax rates - which will be carried out in close consultation with Jersey and the Isle of Man - the Policy Council says that Guernsey must look to provide certainty for investors, and seek to maintain the respect of the international community.
“It is also of fundamental importance that Guernsey ensures the outcome of the next stage of the corporate tax strategy be fully sustainable in the long term, and mitigate any negative economic effects on our economy,” added the report.
The Policy Council anticipates that proposals to revise the corporate tax system will come back to the States as soon as practicable after full consultation and discussion early in 2010.
.
Network Tweets Archive
| Resources | Partners
| Site Map | Links
| Newsletter
Archive | Contact
| RSS Feeds
About | Syndication |
Advertising & Marketing |
Recruitment |
Terms & Conditions |
Privacy
Copyright © 2012 - All Rights Reserved - Tax-News.com
All content provided by BSI Media
IMPORTANT NOTICE: Tax-News.com has taken reasonable care in sourcing and presenting the information contained on this site, but accepts no responsibility for any financial or other loss or damage that may result from its use. In particular, users of the site are advised to take appropriate professional advice before committing themselves to involvement in offshore jurisdictions, offshore trusts or offshore investments.
Write a comment