Guernsey To Propose Corporate Tax Changes

by Jason Gorringe, Tax-News.com, London

05 May 2010

Guernsey’s Chief Minister, Lyndon Trott has announced to the island’s legislative assembly, the States, that proposals for a new corporate tax regime, to replace its 'zero-ten' system, will be tabled when the budget is debated in December.

Following last year's announcements by the governments of Guernsey and Jersey that they would be exploring changes to their corporate tax regimes, it is anticipated that both territories will announce similar reform proposals later this year.

According to Trott, a public consultation is to be launched in the summer, with the results of this to be published in the autumn of 2010.

Trott said that any new corporate tax regime must be "simple, competitive, internationally acceptable, based on a solid rationale, promote a sustainable economy, and must give rise to other benefits such as double taxation agreements."

The Isle of Man, which has a similar corporate tax regime to the Channel Islands, has already launched a public consultation on future changes to business taxation.

The revision of the three territories’ zero/ten schemes is necessary because of renewed pressure from the European Union and its Code of Conduct on Business Taxation. The tax regimes of offshore financial centers are also under increased international scrutiny by the Organization for Economic Cooperation and Development and the Group of 20 nations.

Jersey’s Chief Minister Terry Le Sueur said last October after meetings with his Guernsey counterpart, that cooperation between the two islands in this area would increase considerably.

In a later meeting in mid-November, the governments confirmed they would work together "to counter the threats to the economic prosperity of the Channel Islands." Ministers have agreed a political framework that will allow officers to develop joint policy responses to safeguard the interests of all islanders.

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