Guernsey To Hold Off On EU Savings Tax Decision

05 February 2003 Guernsey announced this week that it will be following Jersey's lead in refraining from making a decision on the EU's Savings Tax Directive until the European bloc's Code of Business Conduct is discussed in March.

Speaking at the Jersey Taxation Society's annual general meeting recently, its president, John Riva revealed that the jurisdiction's compliance with the savings tax initiative is contingent upon a favourable deal being reached with regard to business taxation. He also raised concerns about the withholding tax option, stressing the potential costs for Jersey's finance centre.

Guernsey's Advisory and Finance Committee has also decided to consult with the industry before making its choice between information exchange and the withholding tax. However, given that both retail and private bankers have expressed a preference for the latter, there are fears that chaos may result if Jersey, Guernsey, and the Isle of Man decide to adopt different solutions.

Reporting on the situation on Tuesday, the Guernsey Press and Star revealed that:

'[Manx] Assessor of Income Tax Ian Kelly said there would be some concern if the three islands were to take different options. With some of the big four high street banks having offices in all three jurisdictions, customers could easily move their accounts between the islands to suit their needs.'