NEW proposals that provide relief for US multinational organisations from a global 15% corporate tax rate will not impact the expected £50m a year of income to Jersey from the levy, External Relations Minister Ian Gorst has said.
The Treasury Department’s forecast that the new ‘Pillar Two’ tax will bring in £49m in 2026 – the first year that Jersey will materially benefit from the OECD initiative, which is designed to stop multinational companies from avoiding tax by shifting their business activities across jurisdictions.
However, earlier this month, the OECD released details of the ‘Side-by-Side’ system under the global minimum tax rules, which effectively exempt US-parented companies from various rules on domestic and foreign profits.
Facing questions on the issue from Deputy Jonathan Renouf, Deputy Gorst, who also has responsibility for financial services, said: “Jersey has a wide range of groups in our Pillar Two taxpayer base and the majority of these groups will remain within the scope of Pillar Two, following the latest OECD guidance. The OECD Side-by-Side proposals are not expected to impact the Pillar Two base case revenues identified in the Budget.”
He added that the first Pillar Two payments on account were expected this May.
