Jersey's Zero-Ten Regime Vindicated

by Amanda Banks, Tax-News.com, London

15 September 2011

Jersey has received word from the European Union Code of Conduct Group on Business Taxation that the territory's corporate tax regime will meet international standards after the proposed abolition of the island's 'harmful' deemed distribution provisions.

The long-awaited announcement follows months of discussions between the Crown Dependencies, Jersey, Guernsey and the Isle of Man with the European Union after they were notified that provisions in their zero-ten tax regimes ran contrary to the 'spirit' of the EU Code of Conduct.

Both Jersey and the Isle of Man had earlier committed to remove similar elements of their regimes, relating to deemed distribution and attribution provisions, identifying these as the areas being concentrated on by EU negotiators.

Welcoming the unofficial conclusion of the EU negotiations, Jersey Chief Minister Terry Le Sueur said:

“Following the ongoing Review of our Business Tax Regime, the Treasury Minister proposed, and the States then agreed, legislative amendments which aimed to remove elements of our legislation that were considered harmful by the Code Group.”

"At its meeting [on] September 13, which was attended by Jersey officials, I am pleased to report the Code of Conduct Group accepted that our rollback proposal would remove the harmfulness of our regime. This has to be ratified by ECOFIN in December at the end of the Polish Presidency.”

"This is excellent news for Jersey, and vindicates the consistent stance maintained by the Treasury Minister and myself over a long period.”

"In these challenging times it is good to be able to present members with some very positive news, which should serve to significantly strengthen confidence in our island’s future."

Recommended