Guernsey to introduce 10% tax on financial services companies?

It is looking increasingly likely that financial services companies in Guernsey could soon find themselves having to pay 10% tax. 

Earlier this year the EU Code of Conduct Group approved Guernsey's zero-10 tax regime, following the Island agreeing to scrap "deemed distribution" rules to which the EU had earlier objected.  The scrapping of the deemed distribution rules has, however, left a significant hole in the Island's finances and one way of addressing that issue would be to require financial services businesses to pay tax at 10%, rather than at the 0% rate which is currently applicable.  This would bring the Island into line with Jersey, which already levies 10% tax on financial services businesses, and therefore there is a good degree of confidence that the move would not lead to a loss of business to the Island.  

Treasury and Resources minister Gavin St Pier has confirmed that extending the scope of 10% taxation had been widely discussed in various circles.  Although he refused to be drawn on whether this will be included in his budget proposals, it would be a brave man who bet against it.