2009 retention tax payments made to the EU Member States

Jersey paying agents retained and passed to the Comptroller of Taxes a total of £11.8 million of retention tax for the year 2009. This is in accordance with agreements entered into with each of the 27 EU member states on the taxation of savings income that individuals resident in the member states are receiving on deposits in the Island.

Under the terms of the agreements, 75% of the tax retained (£8.85 million) is sent to the individual member states and the remaining 25% (£2.95 million) is retained by the Treasury.

The tax sent to the member states and that retained by the Treasury is substantially less than for 2008, when the figures were £26.72 million and £8.91 million respectively. This is due to the very substantial reduction in interest rates following the global financial crisis.

EU Savings Directive retention tax distribution list

Year 2009 (distributed 30 June 2010)
		GBP	EUR	USD	CHF	Sterling total
Austria	2009	52,773	3,337	1,416	0	56,647
Belgium	2009	117,362	21,400	2,467	331	138,186
Bulgaria	2009	4,252	502	5	0	4,702
Cyprus	2009	164,178	5,531	30,053	0	188,287
Czech Republic	2009	22,105	3,961	422	0	25,900
Germany	2009	291,228	32,888	10,311	9	327,093
Denmark	2009	31,023	1,461	1,124	0	33,002
Estonia	2009	240	0	0	0	240
Spain	2009	769,103	48,223	16,983	2	822,884
Finland	2009	12,724	114	228	0	12,971
France	2009	655,705	52,289	89,150	8	759,169
Great Britain	2009	4,524,845	289,887	280,302	4,566	4,964,539
Greece	2009	128,950	76,447	63,890	69	237,832
Hungary	2009	33,213	1,304	218	0	34,512
Ireland	2009	218,668	13,111	10,396	3	236,977
Italy	2009	283,745	21,791	6,980	0	307,541
Lithuania	2009	829	14	5	0	844
Luxembourg	2009	13,690	934	14	0	14,529
Latvia	2009	2,075	44	41	0	2,140
Malta	2009	178,958	2,790	12,031	0	189,122
Netherlands	2009	140,782	28,722	4,186	0	169,023
Poland	2009	31,322	3,326	540	0	34,628
Portugal	2009	157,081	19,077	14,277	557	183,179
Romania	2009	4,888	1,706	1,534	0	7,714
Sweden	2009	88,553	6,165	3,522	2	96,290
Slovenia	2009	2,091	7	0	0	2,097
Slovak Republic	2009	2,001	190	348	0	2,397
		7,932,384	635,221	550,443	5,547	8,852,445

Supplementary information

When the EU member states implemented, with effect from 1 July 2005, a directive on the taxation of savings income, Jersey, in common with a number of other dependent or associated territories of the member states and 5 European third countries (Andorra, Liechtenstein, Monaco, San Marino and Switzerland), agreed to support the European Union by applying a withholding / retention tax to savings income arising in the Island, the beneficial owner of which is an individual who resides in a member state. Within the European Union, Austria, Belgium and Luxembourg are also applying a withholding tax. The remaining 24 member states of the European Union are exchanging information on savings income.
To give effect to their support for the EU initiative, the States of Jersey enacted the Taxation (Agreements with European Union Member States) (Jersey) Regulations 2005.
Under these regulations, the Comptroller of Taxes is appointed as the competent authority for the collection of the tax and its remittance to the relevant member states.
The regulations provide that tax retained in respect of each year be transferred to the relevant member state within 6 months of the end of the tax year. For the first 3 years (July 2005 – July 2008) retention tax was at the rate of 15%; for the following 3 years (July 2008 – July 2011) the rate is 20%; and thereafter the rate will be 35%.
The agreements with the 27 EU member states provides for the individuals subject to the retention tax to choose to opt for voluntary disclosure of information to the tax authorities of their member state of residence as an alternative to paying the tax. For the year 2009 those disclosing accounted for some 65% of the interest payments covered by the agreements with the member states (for 2008 the proportion was 57%).