From C Clark.
IT is with interest that I read in your 28 July edition the article by Ben Quérée headed ‘Late tax plan to offset zero-ten’.
This long-standing proposal by Jurat Peter Blampied is said to recover some £4m to £6m per annum through tax on rental values, or possibly 50 per cent of the potential tax loss to the Island quoted in the article at £12m per annum through overseas controlled entities slipping out of the tax net with effect from January 2009.
As yet, I have seen no mention of any means by which further entities could be prevented from becoming exempt from company tax through sale to overseas owners with further resultant revenue loss to the Island. I do not have the data to know whether or not the ownership by Sandpiper of Checkers, or if upon closure of Total’s takeover of Fuel Supplies, the owners of these entities will escape Jersey Comex on their profits.
My understanding is that a foreign entity trading though a branch in the United States is not subject to US income or corporation tax but has a similar liability to the US Revenue by way of a branch profits tax.
Although I have raised this matter at a discussion meeting, to date I have seen no explanation why Jersey should not adopt some such basis of taxing the profits of overseas-owned entities which are trading in the Island.
Further, it would seem to be worth considering economising on the collection of tax by all entities trading in Jersey, whether owned in or out of the Island, being obliged to agree and pay tax assessments to the Comptroller on account of their owners.
Where necessary, the entities could, upon evidence of percentage ownership, issue to the beneficial owners and to the Comptroller of Income Tax appropriate certificates of tax paid.
With the Island’s wealth of advocates with financial expertise and imagination, surely they could formulate a basis which would achieve the foregoing objective while placating any hostility from both the UK Treasury and Brussels.
In the absence of publication of more information on such possibilities, residents can but wonder whether or not all such avenues for the taxing of profits earned in the Island by overseas owned entities have been explored.