Jersey's Finance Centre Disappointed By US Tax Compromise

by Jason Gorringe, Tax-News.com, London

21 August 2002

Reporting on Tuesday, the Jersey Evening Post revealed that the United States has proposed information exchange guidelines in response to the European Union's Savings Tax Directive demands similar to those put forward by the European bloc itself, dashing hopes on the Island that the tax initiative would be defeated by third country objections.

Speaking to the JEP, KPMG tax partner, John Riva observed that the proposals put forward by the US Treasury show that despite several recent reports to the contrary, the Savings Tax Directive is still very much a 'live issue'.

He explained that the main concern now is whether the EU will accept the new proposals as equivalent measures, as outlined in the directive:

'What is meant by equivalent measures has not been defined anywhere, and the EU has provided no guidance on how this term should be interpreted,' he told the Jersey Evening Post, adding that:

'It depends on the political will of EU member states, but my prediction is that as the deadline of 31 December approaches, a more lenient interpretation will be given.'

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