ECOFIN met on 20 June 2011 to formally complete the assessment of Jersey’s existing zero-ten tax regime. This meeting focussed on the business tax regime as it stands at the moment, without considering Jersey’s intention to repeal those elements of zero-ten which were deemed harmful by the EU Code of Conduct Group. These amendments are due to be considered by the Code Group later this year. In its report to ECOFIN the EU Code Group has welcomed the proposed amendments to the zero-ten business tax regime. The report states – “Jersey [has] informed the Group about the proposed legislative amendments to [its] legislation, with a view to removing any harmful elements. The Group welcomed these developments and agreed to review such legislative amendments when discussing the rollback of these harmful regimes under the Polish presidency.”
The EU Code of Conduct Group is expected to assess the amended zero-ten regime in September, with a final decision on the proposed amendments expected from ECOFIN in December 2011.
Throughout the assessment of Jersey’s business tax regime, it was clear that the concerns of the Code Group focused on the interaction of the deemed distribution and attribution provisions with the 0% general rate of tax that applies to Jersey resident companies. This view was supported by the findings of a review by the EU Council’s High Level Working Party on Tax Matters in January 2011.
The Treasury Minister, Senator Philip Ozouf, said in response to the Code Group report “Now that the formal assessement of our existing zero-ten regime has been completed, we can look forward to achieving a positive outcome later this year when our proposed amendments are considered.
“The EU Code Group has already welcomed our proposals to repeal deemed distribution and attribution and has agreed to review these legislative amendments later this year under the Polish presidency.
"The welcoming of our action by the Code Group is, in our view, a further important and positive sign, which has been reinforced by statements from London that zero-ten without the deemed distribution provisions is not in conflict with the Code criteria"
For further information: please contact Wendy Martin on 01534 440435
For interviews, please contact the Treasury Minister, Senator Philip Ozouf on 07797