Treasury minister senator Philip Ozouf said that with the backing of the Island’s Council of Ministers, he plans to repeal both the so-called deemed distribution and attribution rules, with effect from January 2012.
Jersey’s business tax regime has been subject to assessment by the EU Code of Conduct on Business Taxation Group for over a year, with the group making it very clear that these two particular rules were of concern.
Ozouf said: “We are confident that the evidence shows this positive action will result in Jersey’s 0/10 tax regime being considered fully compliant with the Code. We can then keep our existing corporate tax regime while also meeting the concerns of the EU.
“Maintaining tax neutrality provides stability and certainty for businesses operating here and sends a clear signal that Jersey continues to provide a competitive tax system which will safeguard the island’s future economic well-being.”
The Isle of Man’s zero-10 tax regime has also been deemed incompatible with the European Union’s code on business taxation. The Isle of Man Government has acknowledged this and is set to abolish its offending ‘attribution regime for individuals’ law in April next year.