The articles focus on the forthcoming changes to the Island’s tax system, resulting from new European Union rules.Jersey, Guernsey and the Isle of Man have all agreed to comply with the EU tax package, as United Kingdom Crown dependencies, even though the islands are not part of the UK or the EU.
The FT front-page article highlights the fact that trusts, in particular, do not fall within the scope of the EU’s savings tax directive, which is due to come into force in 2005.
This is described by the FT as a ‘loophole’ in the EU’s plans to clamp down on tax evasion.
The newspaper claims that ‘news of the potential flaw will be a concern to member states’ and that the UK Treasury has ‘signalled its anger’ at the islands’ decision to adopt a withholding tax, rather than exchange information.It also refers to the the islands’ plans to reduce corporate tax to zero, with the headline that ‘havens risk local revolt to protect revenue’.
According to the FT, Jersey’s potential deficit could be more than £150 million by 2008.
