The green paper on corporate taxation, to which the letter refers, is to form part of the Island’s overall Fiscal Strategy Review announced in the UK’s 2010 Budget speech. The deadline for responses from Jersey businesses has been set at 31 August in order for them to be fed into the Budget statement to be made in October.
It was decided a review of the regime was necessary after some EU member states said they did not believe the zero-10 tax regime was within the “spirit” of the EU Code of Conduct on Taxation.
However, the EU’s Code Group has yet to properly review the zero-10 tax regime and will not complete its assessment until September, after the deadline for responses has expired.
In the letter, Heather Bestwick, technical director at Jersey Finance and a member of its Fiscal Strategy
Group (FSG), said: “it is inappropriate to respond to a consultation of the structure of corporation taxation recently introduced to address OECD and EU concerns about our previous approach whilst one of those groups is in the course of undertaking its own evaluation.”
She added: “Any response provided before that time [September] would be thus premature and ill informed, and the opportunity to address the issues, if any, raised by the Code Group would be missed.”
Furthermore, the letter emphasised FSG’s view that the ramifications of any “ill considered” changes to the existing regime would be so far reaching for all business in Jersey the review has to reflect the industry’s response to the Code Group.
