There are no current plans to change the current rate of corporation tax in Jersey, the Treasury Minister has confirmed – despite Guernsey reviewing its rates.
Deputy Elaine Millar said that her focus is on creating a “better environment” for corporate taxpayers rather than looking to adapt the current zero-10 rate.
The States of Guernsey has lodged a consultation on several potential tax reforms – one of which could see certain companies pay 15% rather than the current top rate of 10%.
The proposals form part of alternative to a package of tax reforms based on a goods and sales tax – an option known as GST plus.
Deputy Millar said similar moves were “not at the top of her agenda”, with the government focusing on addressing the “experience” of corporate taxpayers for the remainder of this term of office.
This, she said, would involve working in a sense as a “customer service,” through addressing “unnecessary processes” and “bureaucracy” that costs businesses their time.
While she admitted that “tough decisions,” will be required as departmental budgets are continuing to be stretched, Deputy Millar said Jersey is “in a different position” to Guernsey.
What are the options being considered in Guernsey?
Option 1 – Full profits: Tax all profits of regulated firms
Any company that does regulated business would pay 10% tax on all its profits, not just the regulated part.
Option 2 – Sector extension: Tax more sectors the same way
More sectors like professional services, construction and retail would start paying corporate tax at 10% or 20%, instead of most profits being taxed at 0%.
Option 3 – Zero-15: Raise the 10% rate to 15%
Companies that currently pay 10% tax would pay 15% instead, while companies taxed at 0% or 20% would stay the same.
Option 4 – Territorial: Tax only Guernsey-based profits
Companies would pay tax only on profits made from activities carried out in Guernsey, at either 10% or 15%.
Option 5 – Levy: Flat fee per company
Every registered Guernsey company would pay a fixed annual charge (for example £250 or £500), regardless of how much profit it makes.