Jersey and Guernsey consider joint Brussels office to boost their tax negotiation clout

News - Tax

Written by Ray Clancy

Tuesday, 30 March 2010 08:21

The Channel Islands are discussing the possibility of opening an office in Brussels, to be funded on a joint basis, to increase the representation of the islands to the European community.

Neither Guernsey nor Jersey are members of the European Union, of which Brussels is effectively the capital city, although they are both crown dependencies of Britain, which is. But they believe a joint office will improve their influence.

The announcement comes amid fears surrounding the future of the islands’ zero/ten corporate tax regimes, which the islands expect will have to be revised to conform to changes in the European Union Code of Conduct on Business Taxation. The tax regimes of transparent international financial centres are being revised after increased international scrutiny of so-called tax havens, stemming from the G20.

‘Guernsey and Jersey already use the same firm in Brussels to provide advice on a very wide range of issues and it is therefore sensible to continue this cooperation and evaluate the options and benefits of extended representation in Brussels,’ they said in a joint statement.

‘It is normal for Member States, their regions and third countries to have a permanent representation in Brussels and the EU is a very important international entity which has a significant impact on the many issues that affect the Channel Islands. These include trade in agriculture and other goods, air transport, EU and European issues that impact on Financial Services,’ it continued.

Having their own office in Brussels would enable Guernsey and Jersey to be able to ‘build deeper relationships and networks, and not just receive advice but actually respond to it,’ said States of Guernsey chief executive Mike Brown.

He pointed to the City of London Corporation’s Brussels office as a model of the kind that the Channel Islands would seek to emulate. Brown said the Brussels office could open as early as this summer, although he stressed that the plans still require the approval of various authorities in both islands before going ahead. He also indicated that the joint office demonstrated the increasing level of cooperation between the two islands, which are only about 20 miles apart.

News of a possible joint office in Brussels comes two weeks after talks were held in Gibraltar by the chief minister of that jurisdiction and those of Guernsey and Jersey. The Gibraltar meeting was officially described as a fact finding and familiarization visit in relation to taxation, the EU, financial services and political matters but was seen as potentially significant because it followed months of increased scrutiny of Britain’s offshore jurisdictions by authorities in the UK and other G20 countries.

In October 2009, when the Channel Islands voiced their concern over the future of their corporate income tax regimes, Jersey’s Chief Minister Terry Le Sueur, after meetings with his Guernsey counterpart, agreed that cooperation between the two islands would increase considerably.