'Too early' to talk tax but lots to consider

Except that while Education is a wholly local issue and one which successive States have brought upon themselves over some 20 years, global tax issues are never all about the domestic agenda.

As a result, no surprise to hear experts from Guernsey and further afield react to this weekend’s remarkably rapid acceptance by the G7 of US-driven corporate tax reforms, which include ensuring that the multinational giants pay their fair share of tax, and a move towards a minimum 15% corporation tax rate, by saying it was impossibly early to know exactly what impact this would have on Guernsey.

One thing we can extrapolate from that is that zero-10 is far from dead, as some would have you believe, as a result of this, and publicly the line is that the island continues to work with the OECD on international tax matters.

How much easier politics is when all you have to decide is how to comply with a greater power, rather than making up your own approach from scratch. It is a move which Guernsey has become remarkably good at over the years since the finance industry was subject to ever-greater scrutiny.

The ‘wait and see’ game applies across the board on questions which now properly emerge about Guernsey’s corporate tax arrangements and their relationship with the finance industry.

Such as – how reliant are we on a zero rate of tax nowadays? Are we still really a zero-tax jurisdiction, with so many carve-outs now in play? What might the impact be of a 15% corporate tax rate on the Guernsey exchequer and domestic tax reform?

Who in finance relies on a zero product today? Who in that industry would be prepared to up sticks and leave the island if we scrapped it? And is this the start of the end of our much-disliked ‘tax haven’ status?

Tax neutrality is the modern game, not tax breaks and arbitrage.

But while the direction of travel may be being set for us, we can expect Guernsey to continue to be able to stay nimble on tax for some time yet.