A TOTAL £29.

million withholding tax was collected in Jersey last year from European Union residents with savings in the Island.

Jersey is entitled to retain 25 per cent of this total, amounting to £7.

million, with the balance being forwarded to the relevant tax authorities.

A further 80,191 individuals voluntarily disclosed to their home tax authorities the interest earned on their Jersey accounts .

The 15% tax is payable only on the interest earned on individual savings accounts.

It does not apply to trusts or to companies.

The arrangements first came into force in July 2005 as a result of the EU savings tax directive and 2006 was the first full year of collection.

The directive was put in place by the European Commission in order to clamp down on non-payment of tax.

Jersey, together with Guernsey and the Isle of Man, Switzerland, Austria, Belgium and Luxembourg negotiated two options for savers: to notify the tax authorities in their home country, or to authorise their ‘paying agent’ to forward the correct amount to the relevant tax office.