A SCRUTINY panel is calling for input from more than 1,000 firms which will be affected by a “significant” change in the Island’s tax regime.
The changes stem from an Organisation for Economic Co-operation and Development framework known as Pillar Two.
This would apply to Jersey-headquartered firms that earn more than £750 million in global annual profits, and would require them to pay 15% tax from next year, as part of a crackdown on companies moving their profits around several jurisdictions in order to minimise their taxes.
Jersey’s government has lodged a proposition to enact the legislation, which has been in place in the UK and the EU since January, at the same time as Guernsey and the Isle of Man. The States Assembly is expected to vote on the proposed tax changes in October.
A sub-panel of the Corporate Services Scrutiny Panel will carry out the review and will be chaired by Deputy Jonathan Renouf.
He said the panel would examine whether the new standards could impact the Island’s financial competitiveness.
It would also, he said, assess the effect on businesses based in Jersey and evaluate the long-term sustainability and risks of the proposals.
The changes affect around 1,400 companies based in Jersey.
Deputy Renouf said: “The OECD Pillar Two initiative is a significant international tax reform with global implications for international tax policy and corporate tax strategies.
“It will require significant changes to Jersey’s regulatory framework and tax policies, but it’s hoped it will enhance our competitiveness and reputation as a transparent international finance centre.”
The government has estimated that the changes could raise an additional £52 million per year for the taxpayer.
However, former Senator Ben Shenton has previously warned that the tax changes might prompt some companies to move their headquarters away from Jersey.
The Scrutiny panel is inviting those who will be affected by the tax changes to submit their views by visiting the government website or emailing scrutiny@gov.je.
Public hearings will also be held with ministers.
The sub-panel consists of Deputies Jonathan Renouf, Montfort Tadier, Max Andrews and Hilary Jeune, plus Constable David Johnson.
