Jersey and Isle of Man get early Christmas present from the EU

The European Union’s Council of Ministers has finally given its formal approval to the zero-ten business tax regimes in Jersey and the Isle of Man.
The approval was given by Ministers in Brussels on 19th December, a month earlier than expected, after the EU Code of Conduct Group had accepted that the Islands' moves to remove certain deemed distribution and attribution elements to their ‘zero-ten’ tax regimes in September, meant that the Code’s criteria would be satisfied.
Whilst approval was something of a formality for EU Ministers, because the Code Group had already confirmed in the Autumn that it viewed the Islands' amended regimes as compliant, the formal confirmation was nonetheless very welcome for the finance industries in Jersey and the Isle of Man, as it provides clarity and certainty for the Islands' long-term future.

The changes that Jersey has effectively been required to make in order to obtain the approval of the EU are expected to cost the Island in the region of £10 million in lost taxation.  Nevertheless, given the enormous importance to the Island's economy of a stable and attractive finance industry, the developments have largely welcomed in the Island. 

Guernsey, meanwhile, will have to wait a little longer to clarify its position, although it is to be expected that it too will eventually come to an arrangement with the EU that allows the preservation of its own zero-tax product.  Ecofin chose to deal with Jersey and the Isle of Man first, and suspended its investigation of Guernsey's arrangements 18 months ago, to give Guernsey time to conduct its own independent review.  However, in the absence of a resolution to Guernsey's internal review, in the late Autumn Ecofin determined that it would resume its own process. Guernsey will therefore be hoping that it will not take too long to catch up with its larger neighbour and the Isle of Man.