Jersey says it isn’t a tax haven, but there again, every tax haven says that

Posted on

I noted a few days ago that the European Parliament has voted to include Jersey on the EU's tax haven blacklist. That does not add them; the Commission has to agree, but it has raised a storm in Jersey.

The Jersey Evening Post has noted today that:

JERSEY is not a ‘tax haven’ and there are ‘no grounds’ to include the Island on a tax blacklist, the head of Jersey Finance has said.

Well, of course he has. That's his job. But as they also note:

But tax campaigner Richard Murphy of Tax Research UK, a long-time critic of the Island’s tax regime, said that he felt that Brexit had increased Jersey’s chances of being blacklisted.

‘The UK’s presence at the table meant that blacklisting, the EU code of conduct and other things which could have been used as weapons against Jersey were mitigated,’ he said.

‘Now, with the EU quite worried that the UK is threatening to effectively become a tax haven itself, then I suspect there is little goodwill for Jersey, the Crown Dependencies and Overseas Territories.’

Mr Murphy said that the EU would also be more likely to blacklist British territories, as they were no longer within the bloc.

‘The EU Parliament doesn’t always get its way. It tends to be more belligerent and gung-ho than the commission is and it signals its wishes is by passing motions,’ he said.

‘However, the parliament is a barometer of EU mood music. And at the moment tax revenues are in short supply and there’s a lack or sympathy for companies that see the opportunity to take advantage of low-tax jurisdictions.

‘They may have difficulty agreeing on whether Malta is a tax haven because Malta is a member state. But Jersey and the UK being outside means that it is much likelier Jersey will be listed.’

He added that he believed that the development could mean the Island’s ‘zero-ten’ corporate tax regime ends up ‘back on the table’ in negotiations with the EU in relation to the level playing field issue, which involves ensuring business have common rules and do not have unfair advantages.

I haven't got much to add to that. Except for those not familiar with my one-time engagement with Jersey and the fact that it was in no small part down to my persistent campaigning that Jersey was forced to change its laws to comply with EU requirements, there are 720 posts to read here.