Tuesday, September 20, 2011

Jersey: it never disappoints in its ability to disappoint

Tax-news reports:
"Jersey’s Comptroller of Taxes has remitted to EU member states a total of GBP4m in retention tax for the year 2010."
Let's see now. GBP 165bn just in bank deposits in Jersey, latest count. Let's say a 4 percent annual return on that: GBP 6.6 billion. Let's say 20 percent tax on that: GBP 1.3 billion.

Now there are all sorts of ifs and buts about this number, of course: not all of this is European money - p3 shows that at least half are from territories covered by the EU Savings Tax Directive - and much more. But still, a difference of not too far off five hundred to one suggests something is very, very wrong here. Tax-News continues:
The Comptroller of Taxes and the President of the Bankers’ Federation are both happy that the process of exchanging information and the payment of retention tax is continuing to work extremely well. Comptroller of Taxes, Malcolm Campbell, said: "I am extremely grateful once again for all the help received from paying agents, in particular banks, which bear the greatest burden as a result of these agreements."
It certainly does seem to be working well for some. And poor banks: what a burden.

Let's not forget the TaxAnalysts investigation, which is a little old now, but still nevertheless pertinent, as nothing very significant has changed with respect to Jersey's stance:
"At the end of 2006, there were $491.6 billion of assets in the Jersey financial sector beneficially owned by non-Jersey individuals who were likely to be illegally avoiding tax on those assets in their home jurisdictions."
As they like to say Stateside, go figure.

Update: Tax Research has covered this too, here, using some slightly more focused data and more coruscating criticism. But with a very similar conclusion.

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