‘Ignoring EU is not an option’

By Simon Tostevin

GUERNSEY’S tax practices are again coming under the microscope of the European Union.

At its meeting in Brussels yesterday there was pressure from some quarters to widen the scope of the EU’s 2005 savings tax directive to close any perceived loopholes in places such as the Channel Islands, Liechtenstein, Monaco and Andorra.

To change EU tax rules all 27 finance ministers must be unanimous and although there appears to be a lack of consensus at the moment, Ernst & Young partner Graham Parrott said it was important for the island to keep an eye on any decisions made by the EU.

‘While not part of the EU, we have still adopted aspects of its law, for example, the savings directive. Zero-10 is a direct consequence of another EU directive, the code of conduct on business taxation. Being so close to the UK has meant that we cannot simply ignore the EU.’

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