The Zero/Ten Design Proposal

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A decision made to agree to present a consultation document relating to the zero/ten design proposal.

Subject:	The Zero/Ten Design Proposal
Decision Reference:		Exempt clause(s):		Yes
Type of Report: (oral or written)	Written	Person Giving Report (if oral):		n/a
Telephone or e-mail Meeting?	n/a	Report File ref:
Written Report – Title	The Zero/Ten Design Proposal – Consultation document	Written report - author		Julian Morris
Decision(s): To agree to present on 5th May 2006 to States Members, the Financial Services Industry and the general public a consultation document relating to the Zero/Ten Design Proposal.
Reason(s) for decision: To progress the implementation of the Zero/Ten Tax Model according to the Fiscal Strategy timetable.
Action required: Approve the release of the attached Report and consultation document.
Signature: (Minister/ Assistant Minister)			Date of Decision: 28th April 2006

The Zero/Ten Design Proposal

REPORT

THE ZERO/TEN DESIGN PROPOSAL – Consultation Document

Background

In 2004 the States agreed two major changes to Jersey’s tax structure - a reduction in the general rate of tax on corporate profits, from the current 20 per cent rate to a rate of zero per cent for most companies, but with a higher (and yet internationally competitive) rate of ten per cent for financial services providers.

These changes, known as “zero/ten,” are vital to secure a sustainable economic future. They will enable European Union demands for non-discriminatory company taxes to be met, whilst combating competition from other business centres to attract the highly mobile and economically important financial services industry away from the Island.

The Consultation Document

The design of the zero/ten tax model is of a highly complex and technical nature and a considerable amount of research has been undertaken in developing further the detailed design of the tax model.

It is important that the entire process of the zero/ten implementation is open and transparent, with the maximum possible involvement of the Jersey public and business community. The attached consultation document is intended to achieve that objective, although it is acknowledged that due to the nature of its complex and technical detail the issues raised in designing such a tax model may only appeal to a limited section of the community.

Comments and responses from States Members, and from members of the business community and the general public, are most welcome. These should be submitted by 30th June 2006 as outlined in the Document.

Senator Terry Le Sueur

Minister for Treasury and Resources

28th April 2006