Today’s vote came during a meeting of the EU Environment Council, and formally ended a saga that began more than two years ago, when a review of zero-10 corporate tax arrangements was first announced.
Under zero-10 regimes, most businesses pay no corporation tax, while some industries, such as banks, pay 10% and a few pay 20%.
ECOFIN’s approval had been seen largely as a formality after the EU Code of Conduct Group on Business Taxation, which had been asked to consider whether the regimes were harmful to EU member countries, declared in September that it no longer had problems with the islands’ schemes, after both agreed to revise anti-avoidance elements of their individual tax codes.
Guernsey also has a zero-10 tax scheme, which will be examined by the Code Group next year, Guernsey Chief minister Lyndon Trott announced last month.
The vote originally had been expected on 30 Nov, but as reported, was postponed due to the press of other business.
It is understood that the matter was was brought forward to today because there was a desire on the part of EU officials to complete all current Code Group business by the end of the year, when the term of the current EU president ends.
Businesses on both islands would have been keen to see the zero-10 matter concluded, as uncertainty about corporate tax makes long-term planning difficult.
The Code Group announced the review of Jersey and the Isle of Man’s zero-10 schemes in 2009 in response to pressure from some higher-tax EU countries, which regard zero-10 schemes as predatory.
In a statement this evening, Jersey treasury minister Philip Ozouf noted that the journey to ECOFIN’s approval of the island’s zero-10 tax regime had been "long and challenging" and added: “The Code Group’s decision today is extremely significant as approval of Jersey’s tax system.
"I hope that this news will be welcomed as a statement of confidence in past decisions but, more importantly, now that approval has been finally secured, in the positive future of our island.”
