A new tax standard agreed in principle by the G7 Group "has nothing to do with Zero-Ten" and will have very little effect on Guernsey, according to a senior politician.
A new global tax standard of 15% has been agreed following calls from the US, with President Joe Biden looking to clamp down on companies shifting their profits to ‘so-called’ tax havens.
The news suggested the end of Guernsey’s ‘Zero-Ten’ regime. Something the Treasury Lead for Policy & Resources refutes.
“It really has nothing to do with Zero-Ten,” said Deputy Mark Helyar. “Pillar One only applies to very large multi-national companies."
The Pillar One Blueprint is a piece of international work done to define an inclusive tax framework, reflecting an increasingly digitalised economy.
The G7 agreement focuses on multi-billion-pound international companies. “From a Guernsey perspective, it has very little effect,” said Deputy Helyar.
Pictured: “It’s to be welcomed I think, it’s a completely new way of approaching this tax deal,” said Deputy Helyar.
“If it’s approved it’ll help level the playing field in terms of multi-national tax,” continued Deputy Helyar.
“The next G20 meeting is coming up in July, then it needs to go in front of the OECD, and it could take several years before an accord appears,” he said, when discussing how long it could take before any actual changes come into force.
“Several jurisdictions will contest it," he added.
Deputy Helyar emphasised the collaborative work being done on the new tax deal and Guernsey’s voice in the conversation.
“We feed into where plans might have issues to our economy,” he said. “We were aware of this.”
The Channel Islands were criticised in the Financial Times this week by a former HM Revenue and Customs official.
Sir Edward Troup used to be the Head of HMRC and was quoted by the FT Economics Editor, Chris Giles as saying: “The UK government is unlikely to worry too much, however, if the islands find it harder to prosper in a new world.”
“The Channel Islands are an irritant whose fate Whitehall cares little about.”
Deputy Helyar dismissed the slight from Sir Edward. “We’re independent from Whitehall. We set our own taxes. We may well be an irritant, but we’re still here."
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