As global pressure rises for minimum corporate tax rates, Deputy Parkinson, a long-term critic of the island's zero-10 system, described the island's zero product as 'damaging'.
Guernsey has a general zero corporation tax with a number of exceptions.
US treasury secretary Janet Yellen is the latest international figure to call for an international tax overhaul, joining a United Nations panel demanding action to combat tax competition.
‘Guernsey’s corporate tax regime is dead,’ Deputy Parkinson told the Guernsey Press. ‘The zero tax rate is unacceptable to other countries around the world. I think it has damaged our reputation. Whatever we may say about ourselves, the rest of the world sees us as a tax haven.
‘We can talk about cooperation and transparency, but it is very difficult to argue that a country with a zero corporate tax is not a tax haven, and no one believes us anyway.’
He believed a way ahead for the island would be a territorial tax regime, applied to a company’s profits derived from Guernsey.
‘We should jump before we are pushed,’ added the former Treasury Minister, who proposed his own solution to the adoption of zero-10 corporate tax standards in the island more than a decade ago, and has frequently criticised the system ever since.
Deputy Parkinson suggested a fiscal policy review by Policy & Resources was an opportunity to take the issue forward, not least with Guernsey currently experiencing a high deficit in the public finances.
The committee responded that it was cooperative and 'actively engaged' in the development of global tax standards.
Deputy Mark Helyar, Treasury lead on Policy & Resources, said: ‘Guernsey has already been recognised by successive rigorous assessments by the EU Code of Conduct Group and EU Finance Ministers, Ecofin, as well as by the OECD Forum for Harmful Tax Practices, as being cooperative, transparent and having a tax regime that is not considered harmful.
‘Guernsey is actively engaged in the work to develop new international tax standards, such as the OECD work on addressing the challenges arising from the digitalisation of the economy, which deals with new rules to determine taxing rights between jurisdictions for digitally-intensive large multinational businesses and introducing the concept of a global minimum effective tax rate.
‘The development of an international standard in this area will help ensure that countries do not take unilateral action, and Guernsey is working to support an international solution and a level playing field.
'The OECD has committed to reach agreement by July of this year and the recent moves by the US to try to encourage international consensus on the OECD initiative is a significant contribution to this global debate.'
The UN panel has called in its report for ‘fairer rules and stronger incentives to combat tax competition, tax avoidance and tax evasion, starting with an agreement on a global minimum corporate tax’.
It said: ‘The international community should create mechanisms to ensure taxpayers cannot avoid paying taxes.
‘A global minimum corporate tax, setting a rate of 20-30% on profits, would help limit incentives against profit shifting, tax competition and the race to the bottom. Its adoption would greatly increase fairness.’
It also called for action to be taken as part of work on Beps (base erosion and profit shifting) and for a legitimate, universal UN tax convention.
In reference to a global minimum corporate tax rate, it said: ‘The minimum corporate tax needs to be designed to allow countries to appropriately incentivise sustainable development investment while retaining sufficiently high effective taxation.’