‘Real economic activity’ definition is P&R priority
THE European Union is yet to specify what Guernsey needs to do to ‘strengthen its approach to economic substance’.
Guernsey and Jersey have been listed as ‘co-operative jurisdictions’ by the EU after it created a new tax blacklist, however both islands have had to commit addressing the existence of ‘offshore business that attracts profits without real economic activity’.
Policy & Resources said it was working to establish exactly how to satisfy this requirement.
‘The specific concerns have not yet been established and as a next step, the P&R committee has committed to enter into early dialogue with the Code Group about the concerns in respect to economic substance and will be looking at what steps can be taken to address these during the course of next year.
‘These steps will be developed working closely with industry with a view to implementation during 2018. This position is the same for Jersey and the Isle of Man, who we will also work closely with.’
Graham Parrott, director of Fitzroy Tax Services, said Guernsey did not host ‘brass plate’ companies.
‘[The priority should be] retaining our zero tax arrangements while making clear through our regulatory processes that we are not encouraging “brass plate” companies, which do not work anyway from a tax point of view,’ he said.
Full story in today's Guernsey Press