Mon, 23/04/2012 - 06:00
Guernsey’s zero-10 corporate tax regime has been deemed harmful by the EU’s Code of Conduct Group on Business Taxation.
The Code Group had previously ruled similarly in relation to both the zero-10 regimes of both Jersey and the Isle of Man.
Guernsey had argued that the offending element from the Jersey and Isle of Man regimes, known as deemed distribution, was different in its tax system to the extent that the Island’s zero-10 regime was actually compliant with the Code Group’s criteria.
However, on the day following a General Election in the Island, a statement from Guernsey’s Policy Council said: “Whilst accepting the operation and timing of Guernsey’s deemed distribution regime differed to that of Jersey and the Isle of Man, the European Union’s Code of Conduct Group on Business Taxation this week determined that its de facto effect was the same – and thus harmful.
“We expect to be formally notified of this conclusion shortly and provided a detailed explanation of the European Commission’s technical assessment of the deemed distribution regime in due course. Once we have received detail of the assessment and the substance of the Code Group’s discussion, Ministers will be able to meet to discuss what actions are appropriate to recommend to the next Policy Council and States [of Guernsey, the Island’s parliament].”
Under Guernsey’s zero-10 regime, all companies are taxed at 0%, except for the profits of specified banking activities which are taxed at 10% (and local utilities at 20%). However, Guernsey resident shareholders are taxed at 20% of profits from either actual or deemed distributions, where the latter include dividends, disposal of shares, migrations, liquidations and investment income.
It now looks certain that Guernsey will follow Jersey and the Isle of Man in removing deemed distribution as a way to retain the zero-10 regime as a whole. Guernsey also has a tax exempt regime for collective investment schemes and it is expected that later this year it will be extended further to apply to any vehicle which is part of a fund structure.
Mon 22/12/2014 - 06:30
Fri 18/07/2014 - 14:03
Thu 17/07/2014 - 12:06
Tue 15/07/2014 - 11:51
Thu 25/06/2015 - 10:40
Thu 15/01/2015 - 08:19
Mon 22/12/2014 - 06:30
Thu, 08/Oct/2015 - 14:38
Thu, 08/Oct/2015 - 14:32
Thu, 08/Oct/2015 - 14:26
Thu, 08/Oct/2015 - 14:23
Thu, 08/Oct/2015 - 14:21
Thu, 08/Oct/2015 - 14:19