Responding to a recent States of Jersey consultation paper on taxation ahead of next Monday’s original deadline for comment, Jersey Finance, the marketing association which represents Jersey’s financial services industry, responded with the results of a survey of its member firms’ views that revealed a majority, or 69%, think there should be no change or few changes to the current zero-10 set-up.
In a separate development, International Adviser understands that Jersey Treasury Minister Philip Ozouf has agreed to a two-week extension of the deadline for submission of responses to the consultation paper. This follows a request from Jersey Finance last month for more time, in order that Jersey officials might have a better understanding of the mood in Europe, where the EU’s Code of Conduct Group has said it will review the zero-10 tax regimes of the Crown Dependency islands in September.
The Code of Conduct Group is an EU body that monitors tax compliance.
As reported, the States of Jersey set the deadline for responses for the end of August in order for the comments to be considered in time for the island’s Budget statement in October.
Zero-10
Under zero-10, most companies pay no corporation tax, although certain sectors, such as banking, pay 10%.
Such regimes are popular among offshore jurisdictions that use them to lure business from high tax countries, but are sometimes criticised by higher-tax countries that regard them as predatory.
Possible negative effect seen
More than a third, or 39%, of the 49 senior business executives who completed the Jersey Finance survey earlier this month said that that thought a move away from zero-10 would have a negative effect on their company, Jersey Finance said.
Almost two thirds, or 65%, said they believed that a change to the zero-10 regime “would have an adverse effect" on Jersey’s status as an international finance centre.
These results reinforce "the need to think carefully before any alternatives to zero-10 are considered, to ensure that any move does not affect Jersey’s finance industry negatively,” said Jersey Finance technical director Heather Bestwick.
Jersey Finance said a copy of the full results of its members’ survey will be sent to the Jersey government.
