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Income Tax (Amendment No. 33) Law concerning interest rate on income tax repayment and recovery of tax in bankruptcy.

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A decision made (01/06/2009) regarding: Income Tax (Amendment No. 33) Law concerning interest rate on income tax repayment and recovery of tax in bankruptcy.

Decision Reference:  MD-TR-2009-0080

Decision Summary Title:

Income Tax (Amendment No. 33) Law.

Date of Decision Summary:

27 May 2009

Decision Summary Author:

David Le Cuirot

Deputy Comptroller of Income Tax

Decision Summary:

Public or Exempt?

Public

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

N/A

Written Report

Title:

Income Tax (Amendment No. 33) Law.

Date of Written Report:

27 May 2009

Written Report Author:

David Le Cuirot

Deputy Comptroller of Income Tax

Written Report :

Public or Exempt?

Public

Subject:

Lodge au Greffe Income Tax (Amendment No. 33) Law concerning interest rate on income tax repayment and recovery of tax in bankruptcy.

Decision(s): The Minister approved the Income Tax (Amendment No. 33) Law and accompanying report for lodging ‘au Greffe’ on 2 June 2009 with a request for debate on 14th July 2009

Reason(s) for Decision: To enable the Income Tax (Amendment No. 33) Law and accompanying report to be lodged ‘au Greffe’ on 2 June 2009 and debated on 14 July 2009.

Resource Implications: As in report.

Action required: Forward the Income Tax (Amendment No. 33) Law and accompanying reports to the Greffier of the States and request that the projet be lodged ‘au Greffe’ and set down for consideration by the States on 14 July 2009.

Signature: 
 
 

Position: Senator P. Ozouf, Minister for Treasury and Resources 
 

Date Signed:

Date of Decision:

Income Tax (Amendment No. 33) Law concerning interest rate on income tax repayment and recovery of tax in bankruptcy.

INCOME TAX (AMENDMENT NO. 33) (JERSEY) LAW  
 
 

REPORT  
 
 

Interest rate on income tax repayment  

The Income Tax Law provides that the Comptroller shall add a repayment supplement on tax which has been overpaid. The repayment supplement represents interest at the rate of 0.3% for each month in which the tax has been overpaid. This monthly rate converts to an annual non-compounded equivalent percentage rate of 3.6%. The uncertain economic climate has led to a significant drop in interest rates which now currently stand at a base rate of 0.5%.As a consequence of this the interest rate used in the calculation of the income tax repayment supplement has been amended to 0.03% which converts to an annual non- compounded equivalent percentage rate of 0.36%.  

A provision has also been made to give the Minister of Treasury and Resources the power to change the interest rate by Order. 

Recovery of tax in bankruptcy  

Income tax debts for the year in which a bankruptcy or en desastre occurs and the preceding year rank as preferential debts. ITIS and GST debts do not rank as preferential debts. The purpose of the amendment to the Income Tax Law is to align ITIS and GST debts with income tax debts so that all three shall rank as preferential debts for a period of 2 years.  

There are no manpower implications. 

There will be a saving in the interest paid on tax refunds of approximately £222,000.

 

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