Report Warns Over Impact Of Savings Tax Directive On Offshore Centres

by Amanda Banks, Tax-News.com, London

05 March 2003

A report released by business information company, Datamonitor last week has warned that the EU's savings tax agreement is likely to have a devastating impact on the UK's offshore centres. However, according to the Jersey Evening Post, leading finance industry officials in the jurisdiction were unconcerned by the conclusions contained within the study.

Writing in the wake of the agreement which was reached in January, Oliver Guirdham, the report's author, observed that:

'UK offshore territories are likely to be among the worst affected by the directive,' continuing: 'Datamonitor forecasts that fully compliant, information swapping territories are likely to lose 58% of offshore funds and deposits invested by EU citizens by 2013. This will have a dramatic effect on the financial services industries in the offshore territories, such as those in the Channel Islands and the Caribbean.'

However, according to the JEP, Policy and Resources President, Senator Frank Walker was upbeat on the future for Jersey's finance industry, despite the Datamonitor report's findings.

'Even within the EU, it [the agreement] only concerns private citizens,' he explained. 'The vast majority of investors in Jersey already have their funds in trusts, companies or other vehicles, and those who currently don't can transfer. Jersey has always changed, it has always adapted and it has always come through - and there is every reason to remain confident. And that confidence is not just mine but shared by the industry.'

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