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Guernsey To Retain Zero-Ten

by Jason Gorringe,, London

02 December 2011

Guernsey's Chief Minister has said that the island will retain a zero headline corporate tax rate following the European Union's review of its tax regime, scheduled for next year.

Chief Minister, Lyndon Trott told Guernsey's parliament, the States of Deliberation, that: “As I have made very clear throughout the course of the last two years, Guernsey will not undermine its economy through any revisions to its regime, nor by the timing of those revisions. To that end I make it very clear again that front and centre of the review is ensuring that Guernsey’s corporate tax regime preserves our international competitiveness. Thus it is very important to be clear once again that the zero product for the clients of Guernsey’s business is paramount and will be retained irrespective of the outcome of the review.”

The Chief Minister's latest update was given in the light of the conclusion by the EU Code Group of Conduct on Business Taxation of its assessment of the zero-ten tax regimes in Jersey and the Isle of Man, and its preliminary decision that they are Code Compliant subject to the removal of their deemed distribution and attribution arrangements. Guernsey, having previously been permitted to conduct its own review, will now be subject to an assessment by the group, a decision welcomed to provide clarity for Guernsey's broadly similar regime.

“That decision does still remain to be ratified by Ecofin,” Trott said. “As we confirmed in a public statement in late October the Code Group, in the absence of Guernsey concluding its own independent review, has determined that it would resume the process of the review of Guernsey’s existing regime, which it had suspended some 18 months ago,” he said.

“We welcomed that resumption, as it will provide technical clarity on unique aspects of Guernsey’s current regime that we believe [is] necessary for us to conclude our review in an orderly and considered fashion. The formal review will take commence early next year, at the meeting of the Code Group in early February,” Trott said.

“Whilst we may regret that it will not be possible to conclude the review process in this States term, we believe strongly that it is most important that the right conclusion is reached and it is important that decisions, and any revisions that may be proposed, are not made in haste, particularly those that may affect the States' fiscal position.”

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TAGS: Isle of Man | tax | business | fiscal policy | international financial centres (IFC) | corporation tax | Guernsey | Jersey | offshore | European Union (EU) | Europe

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