Jersey Urged To Consider Wider Context Of Savings Tax Discussions

by Amanda Banks, Tax-News.com, London

24 February 2003

Speaking to the Jersey Evening Post last week, senior PricewaterhouseCoopers officials urged the Jersey government to consider its relationship with the United Kingdom and the wider context of the tax debate before making any decision on the EU's savings tax directive.

Although many finance professionals in Jersey and Guernsey have expressed a preference for the withholding tax option, which would allow banking customers to choose for themselves, Philip Taylor, senior partner at PwC in the Channel Islands suggested that, given the far greater importance to the Island's economy of the EU's code of business conduct proposals, the industry should consider making a small sacrifice in the name of a harmonious relationship with the UK.

'Any choice we make needs to weigh carefully the long-term interests of the Island and the importance of a constructive relationship with the UK,' he told the JEP, adding that: 'When we look back we may think that the true significance of that choice was that it gave Jersey a valuable bargaining chip in the wider debate in Europe on tax change.'

Tax partner, Jane Stubbs supported this assertion, explaining that in any case, the withholding tax option is probably a temporary one.

'In the long term the world is moving towards information exchange as a way to prevent evasion. Jersey must uphold its longstanding commitment that it will not be a place where EU residents can avoid their due taxes. In a world where perception is all-important, that probably means adopting exchange of information.'

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