Island ‘to play part in global tax solution’
GUERNSEY is going to have to play its part in a global future for corporate tax, the island’s chief minister has said.
Deputy Peter Ferbrache said last week that arguments that the island should look to change its approach to corporate tax while it considered the need to change its own tax base and raise more revenue were premature, and that was reinforced by the announcement at the end of last week that 136 countries, including Guernsey, Jersey and the Isle of Man, had agreed to enforce a corporate tax rate of at least 15%.
The OECD has been working to establish a global solution to reform the international corporate tax framework, impacting how large multinational enterprises are taxed around the world.
Its announcement last week offered clarity on taxing rights of jurisdictions and an agreement that large multinationals pay a minimum effective rate of tax on their profits – agreed at 15%.
‘International tax changes will come up in relatively short period of time and we’ll be influenced by that,’ he said before the announcement.
‘In 2008 zero-10 was the right thing to do, internationally we had no option.
‘But up until then a large measure of our tax was paid by other people [from outside the island], and that’s not going to happen today.
‘All the world is jealous of all the tax revenue they can get, and they are not going to let us get anything more than we earn.’
Guernsey continues to work closely with the OECD on international tax matters, participating at every stage of the discussions, to represent the interests of the islands.
States treasury lead Deputy Mark Helyar said: ‘Guernsey supports the objective of reaching agreement on a worldwide approach and a level playing field which, as we ourselves have previously argued, will help avoid the complexities of unilateral action by individual countries.
Other senior politicians have said that the devil will be in the detail of the OECD proposals.
‘We’d be minded to wait for that [detail] before ploughing our own furrow when it comes to corporate tax. Lots of headlines but challenge will be implementation. A bit like Brexit really,’ said Deputy Heidi Soulsby on Twitter.
Deputy Jonathan Le Tocq added: ‘While I think there will be benefits in a more “level playing field”, this is not a quick fix for our current dilemma.’
Jersey has also offered its support, saying it will be proactive in engaging with all global bodies on tax standards.
