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TAX REGIME 'COULD GENERATE £90M ANNUALLY'
2 September 2024
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Ammar Ebrahim
BBC Jersey political reporter
Jake Wallace
BBC News
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BBC
Some multinational businesses in Jersey could pay 15% corporate income tax
The implementation of a new global tax regime could generate about £90m annually
for the Channel Islands' governments, according to officials.
It is part of the Organisation for Economic Co-operation and Development (OECD)
Pillar Two initiative, which aims to establish a global minimum tax rate of 15%.
Only companies with a global annual revenue of €750m (£631m) or more are
required to pay the 15% rate, which politicians said could generate £50m in
Jersey and £40m in Guernsey.
The scheme is designed to prevent businesses moving to low or no tax
jurisdictions which politicians warned could make the Channel Islands less
attractive.
The threshold means most companies in the Channel Islands will continue to
operate under the zero-10 rule, in which the standard rate of company tax is 0%
while finance firms pay 10%.
'ISLANDS ARE STRUGGLING'
Guernsey Deputy Charles Parkinson is a long time campaigner for corporate tax
reform and pushed to delay the islands implementation of GST in favour of taxing
big businesses.
He said the new regime would bring significant revenue for the governments in
the Channel Islands.
"I believe there are more than 1,000 companies in scope in Jersey, and in
Guernsey there are 600 companies or thereabouts, although due to exemptions only
about 200 will be paying significantly more tax," he said.
"In Guernsey we expect the annual revenue from these companies to be in the
region of £40m."
He added: "For the population as a whole, I think it's a good thing. Both our
islands are struggling with fiscal problems, we don't have the money government
needs to spend on public services, if we get more money in from large
corporations then that can only help."
Mr Parkinson said there was a very small risk that some of the companies would
leave the Channel Islands.
"We have to be competitive on something more than tax, there have to be good
reasons why people want to do business in the Channel Islands," he said.
'ISLANDS COMPETITIVENESS'
Jersey Deputy Jonathan Renouf, chairman of the OECD Pillar Two implementation
sub-panel, said the move was significant.
"The government estimates it will bring in at least £50m in the first year of
operation," he said.
Mr Renouf said there was a possibility the change could make Jersey less
attractive for large companies.
"It's our job to make sure the government is proposing good legislation, that it
will achieve what they think it will achieve," he said.
John Shenton, the tax director at Grant Thornton Limited, said: "In short no-one
knows, and politicians have to put a brave face on it, but I am struggling to
see anything beneficial in the longer term."
Both of the islands' governments will review the global tax proposals.
Follow BBC Guernsey on X (formerly Twitter) and Facebook. Follow BBC Jersey on X
(formerly Twitter) and Facebook. Send your story ideas to
channel.islands@bbc.co.uk.
More on this story
ISLANDS AGREE TO ALIGN TAX STANDARDS
Related internet links
OECD
JERSEY STATES ASSEMBLY
STATES OF GUERNSEY
Tax
--------------------------------------------------------------------------------
Related
ISLANDERS URGED NOT TO DELAY FILING TAX RETURNS
14 hrs ago
Jersey
INDIVIDUAL TAX RETURNS DUE BY 31 JANUARY
3 days ago
Guernsey
REVENUE SERVICE FINDS £6M OF UNPAID TAX IN 2023
3 days ago
Guernsey
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