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IOM, Jersey Tax Reviews To Restart Mid-2011

by Amanda Banks, Tax-News.com, London

10 December 2010


The governments of Jersey and the Isle of Man have noted the meeting of the EU’s Economic and Financial Affairs Council (ECOFIN) on December 7, during which a recommendation in a report by the EU Code of Conduct Group – on the ongoing review of the islands’ 0/10% tax regimes - was endorsed.

Both governments disclosed that they had not been briefed on the outcome of the ECOFIN meeting, instead confirming that ECOFIN had adopted a recommendation that a High Level Working Group be established, tasked with determining “the scope of the [EU] Code of Conduct [on business taxation],” and the two territories' compliance with such, the findings for which are expected to be tabled before ECOFIN prior to the end of the Hungarian Presidency in June 2011.

The High Level Working Group will in particular evaluate the Isle of Man’s attribution regime for individuals, and Jersey’s deemed distribution provisions, to establish whether they fall under the remit of business taxation, and whether their provisions - combined with the islands’ existing 0/10% regimes - give rise to ‘harmful effects’.

Both governments have previously noted that discussions with EU officials have not, to date, included discussion on whether the 0/10% corporate tax format continues to be compliant with changing 'international standards', indicating, perhaps, that the EU may not require a change to the territories' tax rates.

For now, both governments said that while they would continue to closely monitor the situation, discussions with the European Union will likely restart only after the deliberation of the High Level Working Party.

A comprehensive report in our Intelligence Report series, examining in depth the situation of offshore transparency and secrecy in a number of the most prominent 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_report2.asp
TAGS: individuals | Isle of Man | compliance | tax | business | offshore confidentiality | European Commission | fiscal policy | law | corporation tax | Jersey | offshore | legislation | tax rates | standards | European Union (EU) | Europe

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