KPMG hosts seminars on local tax policy

Friday 17 June 2022

KPMG has hosted seminars in Guernsey and Jersey to explore the impact of international developments on local tax policy.

The seminars were led by Guernsey Head of Tax, Tony Mancini, Jersey Tax Partner, Paul Eastwood and Tax Director, Chris Lowe. Both seminars were joined by UK Tax Partner and Head of Investigations, Derek Scott.

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. Mr 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. 

Mr 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. 

Pictured: Tony Mancini presenting to a tax seminar audience in Guernsey.

Mr Scott’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, Mr Eastwood and Mr 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.

Mr 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.”