New legislation which will provide the framework for Jersey’s new Goods and Services Tax has been lodged for debate in the States.
According to Minister for Treasury and Resources, Senator Terry Le Sueur, Jersey’s GST will be the lowest rate in the world and will be pegged at 3% for the first three years. It will also have one of the highest thresholds in the world, with only those businesses with a turnover above GBP300,000 per annum needing to register, thereby simplifying administration.
As a result of the public consultation on GST, all approved charities in Jersey will be able to recover GST on their expenditure through a pay and claim scheme. Following the States debate in October 2006, Le Sueur said he has also decided that all supplies made by approved charities will be exempt from GST. This means that Jersey charities will be treated more sympathetically than those anywhere in Europe, including the UK, the minister claimed.
The draft law also confirms that prescribed medical and paramedical supplies are to be treated as exempt from the tax, and prescribed medicines are to be treated as zero-rated supplies.
"The drafting of this law has been a very big piece of work because it was important to us all that we produced a model of GST which would suit Jersey and be appropriate for our business community to administer," Le Sueur commented.
"I am confident that we have a tax which will work well and which will effectively raise the revenue that we need, to continue to deliver the high quality services which we all enjoy," he added.
The GST legislation is one of a package of measures which will fundamentally reform Jersey’s tax structure in response to the plan to move to a zero/ten system of corporate taxation. The objective of this reform was to maintain Jersey’s high standard of living and buoyant economy by ensuring that the Island’s financial services sector maintained its competitive position in this profitable global industry.
It is expected that the draft law will be debated in mid to late April. The start date for the new tax will be 12 months thereafter, in late April 2008.
A comprehensive report in our Intelligence Report series giving background tax and residence information on many of the key offshore jurisdictions is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report4.asp
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