TREASURY has reacted to concerns about the new powers given to the income tax administrator. It has been under continued pressure, although it said a statement of practice would be written up on the measures known as section 67.
With its latest round of zero-10 legislation, the department has decided to give any statement of practice statutory backing.
‘What was decided was that if we were going to produce statements of practice for both section 67 and other issues in future, these statements should have some sort of legislative relevance so that people can then rely on the contents if they move to appeal,’ said Rob Gray, assistant administrator of income tax.
He added that it was fair to say this was as a result of the adverse reaction received after section 67.
‘Prior to that, statements of practice were not contentious, but with the section 67 issue, these statements did assume a lot of importance. It was felt maybe the time was right to say people have the right to rely on them.’
The second zero-10 projet will be debated by the States at the end of the month.
‘The Law Officers tell us it’s been the most complex legislative task they have ever undertaken,’ said Treasury minister Lyndon Trott.
Deputies approved the first raft of legislation in September.
‘That came before the States because we wanted as much out in the public domain as quickly as possible. It wasn’t practical to deliver it all at the same time, partly because of events at the beginning of the year.’
It was more efficient for the States to consider the legislation in two stages, he added.
‘The second projet includes all the primary legislation necessary, but there will still be some ordinances needed in future that will deal with minor changes and the most significant of these is one that deals with interest relief, which will go before the States in December,’ said Deputy Trott.
The latest set of legislation includes issues such as taxation of non-residents and deemed distributions.
The latter has been a dominant issue in workshops held by Treasury.
Also addressed in the projet is taxation of utilities, loans to participators, property development profits, double tax flow through to shareholders, loan business and a definition of non-Guernsey income in relation to the tax cap.
Set-off of losses and profits is also addressed.
It is a well-established principle that annual losses can be carried forward for tax purposes and set off against future profits.
But the new law means that for the first time, profits can be carried forward and offset against future losses.
‘We see that as quite a generous gesture to business,’ said Mr Gray.
Article posted on 9th November, 2007 - 12.00am
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