THE future of the zero-ten corporate tax structure is of immense importance to this Island, having been designed to simultaneously counter allegations that we engage in harmful tax practices and protect at least some vital sources of public revenue. Unfortunately, although zero-ten is an established fact of Island life, substantial doubts remain about its acceptability under the European Union Code of Conduct for Business Taxation.

There are, alas, two distinct views of zero-ten, each severely at odds with the other.

The Island’s government, represented by Treasury Minister Philip Ozouf, continues to offer the comforting view that there is nothing fundamentally wrong with our tax structure and that although the EU, and notably the Ecofin group of finance ministers, have yet to comment, all will be well.

On the other hand, others – many of whom have obvious political axes to grind – are adamant that zero-ten must be found wanting if three of the principles of the EU Code are to be upheld. This view might be easily disregarded on the grounds that it is predictably held, but it is bolstered to a degree by Guernsey’s apparent acceptance that zero-ten has already been found wanting.

The truth of the matter is that we remain in a wait-and-see situation. Guernsey might already have concluded that its corporate tax regime will have to be revised very significantly, but the official view here is that our position can still be defended and that it has yet to be finally assessed by its EU scrutineers.

There is nothing wrong with either this ‘so far, so good’ attitude or the very reasonable decision of government to play its cards carefully – as long as Islanders are not fed the message that there is nothing at all to worry about.

Quite clearly there is, not least because a non-specialist reading of the Code of Conduct can only leave doubts about zero-ten’s compatibility on the grounds of a common sense interpretation of what is there in black and white.

Meanwhile, in contrast to its fellow Crown Dependencies, the Isle of Man has already come out fighting, staunchly and quite publicly defending the relevant features of its tax regime. On balance, the strategy being adopted by our authorities would appear to be preferable – as well as hinting at greater sophistication and understanding of the way in which the EU operates.

It seems that there is awareness here that besides not being legally binding, the code and its implications will finally be mulled over by human beings capable of being swayed by far more than the prosaic meanings of words on paper.