Business Eye CI can reveal the reason the European Union remain concerned about Guernsey and Jersey’s tax arrangements.
Both islands have escaped the blacklist, but they still fall short of absolute whitelisting because of ongoing commitments which the EU are yet to be convinced have been enacted.
It has just published its “State of play of the cooperation with the EU with respect to commitments taken to implement tax good governance principles”. This list is known informally as a grey-list.
Despite this, Jersey’s Chief Minister Senator Ian Gorst said: “Reports that Jersey is on a ‘grey list’ are simply incorrect. Ecofin conclusions acknowledge Jersey is a cooperative jurisdiction, has built a positive relationship with the EU, and is determined to meet its commitments by the end of 2018.”
He added: “This outcome reflects the Island’s commitment to the highest standards of tax transparency and information exchange. We cooperated fully with the Code Group throughout the screening process, and have actively pursued a good neighbour policy in our relations with the EU. These positive interactions have borne fruit.”
But documentation from Ecofin, the EU’s Economic and Financial Affairs Council headed by Pierre Moscovici (pictured), published this afternoon shows Guernsey and Jersey pass the ‘transparency’ test, but remain on the ‘fair taxation’ watch list.
The EU has concerns that the islands’ tax systems allow offshore structures which attract profits without real economic activity.
Guernsey’s Chief Minister Gavin St Pier said: “Guernsey has long called for a fair, consistent and objective EU approach in its treatment of both EU and non-EU jurisdictions. I am heartened that EU Tax Commissioner Moscovici, who I met in Brussels just a couple of weeks ago, has publicly called for the new EU list to replace the outdated and inconsistent national blacklists maintained by some EU Member States.”
The most recent example of that was revealed in the so-called Paradise Papers which showed Apple had set up a business in Jersey despite no apparent economic activity in the island.
