Businesses and individuals are being asked for their views on improving the way the International Services Entities (ISE) regime applies to trust companies, in a public consultation released today (17 October 2012).
The ISE regime was introduced in parallel to GST to raise revenue from the financial services industry. Businesses that meet certain conditions can become an ISE if they pay an annual fee. That fee varies depending on the type of business.
The annual fees payable by ISEs have been increased twice in the past two years, and now raise a total of £9.3 million. The ISE regime represents an important contribution to States revenue directly from the financial services sector. The Treasury wants to ensure that these revenues will continue to be raised in a sustainable way.
In 2011, the Minister for Treasury and Resources consulted businesses on the ISE regime as a whole, in part to achieve greater equity between the ISE fees charged to different kinds of businesses. That exercise made it clear that businesses in Jersey value the ISE regime and consider that, on the whole, it achieves its aims of collecting revenue with a minimum of cost and complexity. However, respondents also considered that ISE fees are proportionately greater in some sectors than others, particularly for trust companies.
This Green Paper consults on further changes to the regime which are intended to improve the fairness of the fee charging structure for trust company businesses and their clients.
This Green Paper seeks the views of the trust industry on specific points raised in their responses in 2011, namely:
• Options for amending the fee structure for trust companies so the current “basic” £7,500 fee element is replaced with scaled charges that better reflect the size of the business in question
• Clarifying who is liable to pay the £200 “vehicle” element of the trust company fee
The aim of this consultation is to improve the fairness and transparency of the fees charged to trust companies and their clients.
The Minister for Treasury and Resources, Senator Philip Ozouf, said “The ISE regime was developed to raise revenue whilst minimising the compliance burden on companies that are primarily exporters. It is important that the regime is seen to be fair for the businesses involved.
“Respondents to the 2011 consultation said most aspects of the ISE system are working well, but trust companies felt that charges could be made more equitable. This Green Paper explores ways of doing that.
“I would encourage all affected businesses and interested parties to respond to the Green Paper in order to ensure that their views are heard.”
The deadline for responses to the consultation is 5pm on 25 January 2013. For more information, visit www.gov.je/consult.
Notes to Editors:
1. For further information, please contact Paul Eastwood, Deputy Director – Tax Policy on 440578 (or Senator Philip Ozouf on 07797 713838).
2. The Green Paper on ISEs issued in 2011 and a summary of the responses to that paper can be found at www.gov.je/Government/Consultations/Pages/InternationalServicesEntities.aspx.
3. ISE fees and revenues:
• 2012: £9.3 million
• 2011: £8.5 million
• 2010: £5.5 million
4. Fees have increased twice in the past two years:
• In 2011: The "basic" fee payable by clients of trust companies, participating members of trust company business affiliation groups and unregulated entities doubled from £100 to £200
• In 2012: The fee payable by registered banks increased from £30,000 to £50,000
5. The annual fees now payable for ISE status are as follows:
• Banks: £50,000
• Fund services businesses and fund functionaries: £2,500
• Managed managers: £500
• Other entities: £200
• Trust company businesses: £7,500 plus:
o £200 per each participating member in trust company business affiliation
o £200 per each qualifying client entity administered, apart from trusts