I've just explained why I think Jersey will fail the EU Code of Conduct for Business Taxation rules, again.
Since it is replicating the behaviour of the Isle of Man and the Isle of Man is refusing to budge on this issue, even though it too has failed the EU Code's tests, it seems certain the Isle of Man will also fail the EU's rules.
Remember that if they do the UK has to intervene in the Crown Dependencies' affairs. It has no choice.
Of course they could all say they're becoming independent. But they have no chance of surviving economically if they do, most especially in the case of Jersey. So that's not an option.
The fat lady has definitely not yet sung on this one yet.
NB: Guernsey will not fail if it introduces a 10% corporation tax - as it has said it will. I think that's EU compliant. 0% tax is not. That's the issue.
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Richard
A uniform 0% rate would not fail the EU Code of Conduct. The issue was all about ringfencing, not the rate. The EU cannot force a non-member to impose a particular minimum rate of tax. It is even debatable whether it can force a rate on a member country (as evidenced by Ireland) although 10% seems to be the minimum acceptable rate re EU members.
And Guernsey has not yet said that a 10% rate would not be on a territorial basis. The EU cannot impose a specific tax system on non-members. It can only address issues such as ringfencing, just as it has done so.
And you are wrong to say that the UK “has no choice” and could intervene in the government of Jersey and the Isle of Man just because they fall foul of the EU’s Code of Conduct. On what basis? Sorry but that’s utter rubbish.
It’s tedious to have to explain it again….but:
a) As point 3 makes very clear, this whole issue was not just about ring fencing. That was one of the criteria. Artificial tax arrangements were another. You are wrong.
b) If a 0% tax rate is artificial, and designed to induce a change of location transactions without any economic substance then it is abusive and the EU is allowed to say so, and require change.
c) I know that you don’t like this, but in practice the Crown Dependencies are part of the UK for all official purposes. It’s a reality. Live with it. And as such the UK has to do, and what is more it can, impose its will on the Crown Dependencies if that is the requirement of the EU. Of course they can seek to declare independence. Heaven help them if they do.
I really do think it is time you lived in the real world
(b) A 0% rate for all companies is not artificial. Its a nil rate with no ringfencing.
I can understand the argument that moving an existing company from one jurisdiction to a nil-tax jurisdiction could be considered abusive, but where there is no transfer of an existing company this is simply irrelevant and is a non-issue. I could see the EU imposing its own laws to prevent existing EU companies relocating to Jersey but that doesn’t affect the validity of a 0% rate for all other circumstances.
(c) Factually incorrect. Those words are merely your own interpretation/wishful thinking and do not reflect the reality of the constitutional relationship.
Jersey has always said that
And they’ve always been wrong
The more you say you’re right the more convinced of my argument I’ll be proven correct
Only time will tell re (b).
Interesting that you didn’t comment re (c). You’ve never yet been right on that!
(c) is beyond dispute.
It would be like debating whether the sun will come up tomorrow.
I know I’m right
Predictably (and perhaps unexcitingly for some) the PSG can mostly be relied on to comment on matters appertaining to the failures of the Isle of Man government …
On the matter of “independence” the island already has a de facto independent government with no freedom of information legislation which beneficially enhances the opacity of its secrecy jurisdiction status.
The nonsensical situation exists where the Isle of Man is neither a member of the European Union nor the United Kingdom — instead it butterflies along enjoying those pieces of the economic cake that suit its avaricious purpose whilst disregarding the rest.
A totally independent Isle of Man would be a shipping hazard to the rest of the world and would soon become an economic basket case requiring charity from whoever was misguided enough to bale it out.
As you remark:- The fat lady has definitely not yet sung on this one yet.
Your first remark is indeed true-so often to the point of boredom I`m afraid-as someone who lost out with Equitable Life -but I try to remain calm!
My humble opinion is that IOM legislators are adopting a position of realizing the inevitable-but why conform until you have to? That date seems far from close-as yet,and time is money after all.
Your remark about IOM independence and it`s Shipping Register must be supposition tho-unless you have evidence? Are you implying any reduction in present safety standards?
Regarding “A totally independent Isle of Man would…….. soon become an economic basket case requiring charity from whoever was misguided enough to bale it out”-well it should join the EU ! There are precedents.
Brian
Don’t give up on Equitable Life scam. Sitting doing nothing is boring and unbecoming!
You demean yourself by suggesting that your valued opinion on the IOM legislators is “humble”.. yes of course the government is ducking-and-diving exploiting every “financial ambiguity and loophole” at the expense of poor nations; but the day of reckoning may arrive sooner than you (or it) may think.
The reference to a “shipping hazard” was not directed at the island’s “Shipping Register” (the PSG had overlooked its existence) but to a hazard in the metaphorical sense that the world’s economies will need to plot safe passage around a chunk of rock sticking out of the Irish Sea.
Certainly the Isle of Man could join the EU. But why would the EU want it? It has nothing to offer an economic union already beleaguered with countries in a similar predicament.
The Isle of Man’s future lies in rebuilding a reputation on honesty and integrity.
And that’s the only advice the PSG is prepared to give. Today.
I’ll confess that I’m a little surprised by this posting, since you yourself have argued before now that 0/10 would be EU compliant without ring fences built into personal taxation. While you may or may not be right about the EU’s eventual decision, could this not be seen as a cynical attempt to introduce corporate tax harmonisation without proper consultation among member states? Agreed that a 0% rate does provide an incentive to relocate business, but it could be argued that Guernsey and Gibraltar’s 10% rates, and indeed Ireland’s 12.5%, do the same by being lower than the EU average. If the EU wishes to introduce a minimum level of corporate tax among member states and their dependent territories, should it not do so by proper democratic means?
When the evidence changes I change my mind – it’s called the wise thing to do
The EU signalled very clearly that it thinks the way I’m describing. I worked out why. I’m relaying the consequences.
So sure the EU can say 0% is unacceptable – and I think it is
Harry, ref C
You really need to read this
http://www.taxresearch.org.uk/Blog/2010/12/10/zero-ten-there-was-no-treasury-press-release/
it seems clear to me that the UK will enforce the EU wishes on Jersey if they don’t do them voluntarily.
We have heard it all before, we are a crown dependency, we are not in the EU bla bla bla. Richard is wrong we can do what we like bla bla bla.
But, as consistent as that rhetoric above is the Jersey governments ability to roll over and have it’s tummy tickled by the EU “because we want to remain good neighbours”.
EU said our previous tax laws were no good, so we changed them to zero ten at great expense and revenue loss.
Now the EU says zero ten is no good and guess what, the treasury minister announces changes to satisfy them, despite the previous fanfare of non membership and crown dependency status.
Based on the above facts I’m willing to bet that should Richard be right (yet again) we will inevitably roll over again and let the EU tickle our tummy.
Past behaviour says we will, I’m afraid your defiance does not stack up.
You seem to get my point.
The truth is that the fiction that Jersey legislates as it wishes exists solely because it does not do so. It is convenient to both parties,and (especially the City of London) to pretend Jersey is independent. But that is a pretence. The evidence shows it
Well – we shall see. Time will tell.
You have your view and I have mine and its as clear as night follows day that we won’t agree until one of us is proved right (or wrong). No point in debating it further until then.