This month KPMG in the Crown Dependencies hosted in-person seminars in Guernsey and Jersey. Led by Tony Mancini, Head of Tax in Guernsey, and Paul Eastwood, Tax Partner in Jersey, with Chris Lowe, Tax Director, the seminars looked at how various international initiatives were driving local tax policy and what is the resultant impact on local businesses. Both seminars were joined by Derek Scott, Tax Partner and Head of Investigations at KPMG in the UK, who gave an update on the changing nature and conduct of tax investigations and voluntary disclosures in the UK.
In the wake of the new two-pillar solution to reform international taxation rules, the seminars delved into the latest position for the OECD’s Pillar 1 & 2 proposals. Tony Mancini detailed the GloBE rules and the Crown Dependencies’ response to implementing minimum standards of Pillar 1 and Pillar 2. A key takeaway discussed was how the 15% minimum tax rate, which is a key feature of GloBE, is not a minimum standard and thus is optional for the Crown Dependencies.
Special guest speaker Derek Scott set out how the exchange of information between tax authorities was driving tax enforcement in the UK. This included HMRC enquiries, “nudge” letters based on CRS information provided to the UK, corporate residence issues, and adapting to the challenges from “crypto” assets. Derek’s talk also drew attention to the 12-year assessing time limits, which apply exclusively to offshore issues, emphasising how it is crucial to determine whether this applies in any enquiry settlement.
In Jersey, Paul Eastwood and Chris Lowe addressed the audience with guidance on the compliance interrelations undertaken by Revenue Jersey concerning the economic substance obligations. The complexity of interventions is increasing, and emphasis was placed on focus and attention to detail when complying with FI’s FATCA/CRS increased inspections.
On reflection of the conclusion of a successful three-part Crown Dependencies tax series with a hybrid audience, Tony Mancini commented, “Initiatives like the Common Reporting Standard and economic substance rules were introduced a number of years ago, but we are only now really beginning to see their effects in practice, across the Islands and the UK. We were able to set out how the new environment will impact on businesses across the islands and how they might react.”
The presentation slides can now be downloaded from the Guernsey and Jersey seminars: