Minister refuses to implement immediate business tax increase in Jersey

Jersey’s Treasury Minister Elaine Millar recently stated that there are no immediate plans to increase business taxes in Jersey. The standard rate of company tax in Jersey is 0%, with finance firms paying 10% under the ‘zero/ten’ system. This system has been successful in attracting multinational companies to set up operations in Jersey, contributing to its reputation as a leading global finance center.

The government collects taxes on income and goods and services, but does not collect capital gains or inheritance tax. The standard rate of VAT (value-added tax) is 5% on goods and services, which is lower than the 20% VAT in the UK. This makes it easier for businesses to operate in Jersey compared to other countries, contributing to its competitiveness as a finance center.

However, Deputy Jonathan Renouf suggested that Jersey should consider broadening its tax base beyond just income tax and taxes on spending to reduce the burden on individuals. He argued that this would create a more balanced tax system and provide more revenue for the government.

Minister Millar emphasized the importance of maintaining competitiveness in the finance center and stated that no additional taxes, including business taxes, are currently being considered. She highlighted that Jersey residents pay significantly less income tax compared to those in the UK due to its low standard rates of company and personal taxation. However, she also mentioned that large multinational companies with a group turnover exceeding €750m will be subject to a 15% tax rate from 2025 to comply with international taxation reforms approved by the G20 in 2021.

Overall, the government of Jersey is cautious about introducing new taxes that could impact the competitiveness of the finance center but acknowledges the need for a balanced tax system that does not put undue pressure on individuals.

By Aiden Johnson

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