Guernsey backs 10% corporate tax

Wednesday 28th October 2009, 3:00PM GMT.

Deputies enter Guernsey’s Royal Court building for yesterday’s vote

POLITICIANS in Guernsey have overwhelmingly backed plans to base their replacement of zero-ten with a 10% tax rate for all businesses.

States Members there approved the proposal yesterday – piling pressure on ministers in Jersey who were trying to keep their cards close to their chest.

Guernsey politicians have voted 42 to zero, with two abstentions, to carry out their review of the discredited zero-ten tax system with the presumption of a move to a 10% rate of tax for companies.

A 10% rate of corporate tax is likely to mean a heavier tax burden for working Islanders. Finance companies currently pay at 10%, but shareholders of non-finance firms pay tax on profits as personal income at 20%.

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1
Al

October 28, 2009 at 3:39 pm

So why not set the rate so the burden falls on companies rather than Islanders directly e.g. at a higher figure say 15% ?

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2
Nick

October 28, 2009 at 7:23 pm

This is premature, where is the official rejection of the zero ten scheme?

By agreeing this the Guernsey States are shooting their negotiating position in the foot themselves by sending out the message that they will change their position before they have even been asked to do so officially!

The question they should be asking is “Who is querying the current proposals?”

We have already come unstuck copying the other “Dependencies” if these objections to the zero ten scheme are “Official”!

We need to take our time on this and if necessary go our own way!

Hopefully we, the local voters, are not going to discover some previously unmentioned £35million annual contribution to our economy from the British Government that can be withdrawn?

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3
dave

October 28, 2009 at 10:28 pm

This is a very rushed decision that does not appear to be well thought out.

If ALL companies are taxed a 10%, then much of the company admin business provided by trust companies will go, as previously exempt co’s will not pay 10% corp tax.

On the other hand, if previously exempt companies are given an exemption from the 10% tax, that will not comply with the spirit of the EU requirements.

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4
Rob Roy

October 30, 2009 at 11:34 am

Dave , I understand the logic of what you are saying regarding the previous exempt companies going elsewhere but where? Isn’t this a global process now? G20 are cracking down on the 0% tax rates across all the Finance centres.

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5
dave

October 30, 2009 at 9:10 pm

I don’t think the Cayman Islands are considering introducing 10% corporation tax, other places such as the tax-free zones in the gulf states are keen to build up a finance industry.

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