Business tax practice in the EU spotlight

Business tax practice in the EU spotlight

External Relations Minister Ian Gorst, accompanied by Guernsey Chief Minister Gavin St Pier, met ambassadors and senior officials from a number of EU member states during a trip to the Belgian capital last week.

The trip involved meetings with the ambassadors to the EU of France, Romania, Switzerland and Latvia, as well as officials from Finland, the UK and Gibraltar.

The pair also met representatives of the EU Justice Commissioner, Vera Jourova, whose responsibilities include data protection and anti-money laundering, and the UK Commissioner, Sir Julian King, who has responsibility for EU security policy. The meetings, which were organised by the Channel Islands Brussels Office, involved discussions on Brexit and assessments being carried out on the islands by the EU Code of Conduct Group on Business Taxation.

Last year the group asked Jersey and Guernsey to address the issue of economic substance [the level of real business activity actually being carried out by firms registered in their jurisdiction for tax purposes] as part of a blacklisting exercise, in which a number of jurisdictions were deemed to be ‘non-cooperative’ for tax purposes. Jersey and Guernsey were not blacklisted but along with a number of jurisdictions were placed on a so-called ‘greylist’ and asked to address certain matters relating to taxation by this year.

Senator Gorst said in response that he was planning to introduce legislation to address the code of conduct group’s concerns.

The former Chief Minister said that while a number of issues were discussed during the trip, the meetings with the French Ambassador and Justice Commissioner’s representatives were particularly valuable.

‘From Jersey’s perspective, it is critical that our European neighbours understand the value we place on the contribution their nationals make to our Island,’ he said.

‘Up to 20 per cent of our population is comprised of EU nationals, who provide an invaluable contribution to our community and economy. I was able to reassure our interlocutors that we have developed the Jersey EU Settlement Scheme to ensure their nationals have continued ability to remain in Jersey after Brexit.’

He added: ‘I particularly welcomed the opportunity to meet the new French Ambassador to the EU, and to underline the importance of the Channel Islands’ relationship with France, our nearest neighbour.

‘It was also invaluable to meet with the chief of staff of EU Commissioner Jourova to update her on Guernsey and Jersey’s adoption of equivalent legislation to the EU’s General Data Protection Regulation and Law Enforcement Directive, as well as exchanging views on the shared objective of tackling money laundering and terrorist financing.’

Deputy St Pier said that the meetings allowed them to ‘provide reassurance’ about the steps being taken to prepare for Brexit.

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