Jersey Reports Fall In EU Withholding Tax

by Jason Gorringe, Tax-News.com, London

29 July 2010

Jersey paying agents retained and passed to the Comptroller of Taxes a total of GBP11.8m of retention tax for the year 2009. This is in accordance with agreements entered into with each of the 27 EU member states on the taxation of savings income that individuals resident in the member states are receiving on deposits in the island.

Under the terms of the agreements, 75% of the tax retained (GBP8.85m) is sent to the individual member states and the remaining 25% (GBP2.95m) is retained by the Treasury. The tax sent to the member states and that retained by the Treasury is substantially less than for 2008, when the figures were GBP26.72m and GBP8.9m respectively. This, the Jersey government has surmised, is due to the very substantial reduction in interest rates following the global financial crisis.

The Treasury and Resources Minister Philip Ozouf, commented: “This shows that Jersey continues to honour the commitments that it entered into voluntarily through agreements with each of the 27 member states in 2005, and this good neighbour policy will be maintained.”

Noting that the collection of retention tax relies upon the cooperation of local paying agents, Malcolm Campbell, Comptroller of Taxes, said: “I am extremely grateful once again for all the co-operation and help received from the paying agents, in particular the banks, who bear the greatest burden.”

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