Jersey and Guernsey tax systems face reform after G7 agreement
Jersey and Guernsey's tax systems are facing a potentially major overhaul following a historic agreement between G7 leaders.
At a meeting in London, leaders committed to a global minimum corporation tax rate "of at least 15%", largely led by a push from US President Joe Biden.
It also means that large multinationals will be required to pay tax within the jurisdictions where they operate and not just where they are based.Currently, the 'zero ten' system in place in the Channel Islands sees most companies locally pay no corporation tax on their profits, while financial institutions pay 10%. As a result, some companies who currently pay 0% corporation tax could see that figure rise to 15%.
The UK Chancellor of the Exchequer says the move will 'level the playing field' and ensure multinational companies "pay the right tax in the right places".
Figures in the Channel Islands' financial sectors had a mixed response to what the impact of the plans would be ahead of the meeting, with Jersey's External Relations minister insisting the island would not be forced to make changes.
Further details of the agreement will be discussed at the G20 in July.
Guernsey's Chief Minister says the potential impact of agreement remains to be seen.
Deputy Mark Helyar, who leads on Treasury matters for Guernsey's Policy and Resources Committee, says he is supportive of what has been agreed, calling it an 'important stepping stone'.
ITV News has approached the governments of Jersey for a response.