JTS President Expresses 'Level Playing Field' Concerns Over EU Tax Package

by Robert Lee, Tax-News.com, London

03 February 2003

According to Jersey Taxation Society President, John Riva, Jersey's decision with regard to the EU savings tax agreement may be conditional on the kind of deal the jurisdiction secures when the code of business conduct package is discussed by Ecofin ministers in March.

Reporting on the Taxation Society's annual general meeting last week, the Jersey Evening Post revealed that the Island's participation in the savings tax initiative is reliant on there being a 'level playing field' in relation to the whole tax package.

If not, Mr Riva announced: 'It will be gloves off and back to day one'.

According to the JTS President, the imposition of a withholding tax on non-resident savings income as provided for under the terms of the recently reached EU agreement is not an ideal solution, and is likely to prove costly for the jurisdiction's banks.

However, the code of business conduct discussions are of more relevance to Jersey, he told those attending the AGM, adding that if compliance with the savings tax directive secures a favourable result over company taxation, it will have been worth the effort:

'No one is going to say this directive is good for business - it will be horrifically costly for Jersey and for institutions alike. But if we can accommodate it and get the right deal on the code of conduct, I think it will be worthwhile,' the JEP quoted Mr Riva as observing.

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