Islands under attack

Posted on

Not my title: it’s adapted from one in the Guernsey Press and Star this afternoon. As they say:

EUROPE is running out of patience with Guernsey and other places like it, according to a top anti tax-avoidance campaigner.

And the director of Tax Research UK is warning of Europe’s increasing ‘appetite’ for harmonising tax regimes throughout the EU.

The claims come from chartered accountant Richard Murphy, who is also dubbed ‘the muscle behind the Tax Justice Network’ pressure group, which he founded.

They follow recent comments directed at the islands by the new EU commissioner for taxation and customs union Algirdas Semta.

Now Mr Murphy claims that people close to the European Commission that he has spoken to are indicating that patience is now running out with the offshore Crown Dependencies on this point — something, he said, the commissioner’s latest statement bears out.

First an apology to all others who were founders of the Tax Justice Network: I was not alone!

Second, the story (and they called me, I’d add) is based on a number of conversations I had last week. For those who don’t know the European Commission is planning to start work on the Common Consolidated Corporate Tax Base (CCCTB) again next month. It’s assumed Ireland is so knocked out it can no longer object.

And second, the EU Code of Conduct group met on 23 September to hear Colin Powell (with whom I have been in correspondence here) present his reasons for Jersey being compliant with the Code. I’m told they were not impressed. It’s not 0/10 they worry about: that got the nod years ago. It’s the fact that Jersey has [persisted in maintaining the ring fence it was told to get rid of by shifting it into personal taxation that deeply offends them. I did, of course, suggest that this problem existed as long ago as 2005: now the world has caught up.

But this means a double blow for Jersey et al. Any CCCTB formula will be heavily weighted against profit allocation to tax havens, you can be sure. And the Code group are going to demand more change — and maybe positive tax rates in Jersey, Guernsey and the Isle of Man — all of whom are going bust for lack of tax revenue right now.

What a mess.

And all avoidable if only they'd listened.