The Tax Review: Phase 2

Back to meeting
Proposition Reference Article Billet d’État
P.2022/112 Amendment 2 Parkinson/McKenna 5 II


Policy & Resources Committee


To delete propositions 2 to 6 and substitute therefor: 2. To agree that the States will address the current and future fiscal deficits of the States of Guernsey by a two-phase reform: A) In Phase 1 to design a new Corporate Income Tax (‘CIT’), on a territorial basis with a general rate of 10% to 15% to raise a minimum of £20m per annum, and that a States’ Investigation & Advisory Committee (‘SI&AC’) shall be established with the Constitution and Mandate set out below which shall report back to the States of Deliberation no later than the end of the current States term. • Title Corporate Income Tax Investigation & Advisory Committee • Constitution Two Members who shall be members of the Policy & Resources Committee (one of whom shall be President) and Two Members (upon establishment of the Committee to be Deputy Charles Parkinson and Deputy Gavin St Pier) who shall be Members of the States and One voting member who shall not be a Member of the States who shall be elected by the other members of the SI&AC but who shall be an independent international tax consultant who does not have a client or customer relationship (at the time of his or her election and whilst he or she is a member of the Committee) with a company liable or potentially liable to tax in Guernsey on its profits. • Mandate To develop proposals for and define the detailed features of a new tax (to be known as Corporate Income Tax or CIT) to be levied at a rate of 10% to 15% on a territorial basis on the profits of Guernsey registered companies and other companies doing business on Guernsey. To engage and consult with those companies whose profits will or may be subject to CIT, representative bodies of such companies, the other Crown Dependencies, relevant international bodies and any other persons, bodies or organisations that the Committee thinks fit for the purpose of discharging its mandate. And in particular to consider: a) The source rules for categories of income, including but not limited to: i) Banking income ii) Insurance income iii) Franchise income iv) Income from intellectual property b) The desirability of a new ‘Participation Exemption’ in the Guernsey tax system c) Any necessary amendments to Guernsey’s Unilateral Double Tax Relief provisions d) Any Economic Substance Test which may be necessary or desirable e) The rates of Guernsey withholding tax on dividends, interest and royalties paid by Guernsey residents to non-Guernsey residents, f) If appropriate, other ideas and opportunities as they arise in relation to corporate tax that would improve the net financial position or sustainability of the States of Guernsey in the longer-term, g) How better to understand the scale of accumulated untaxed, undistributed profits in Guernsey-resident companies since the introduction of Zero-10 in 2008 and the abolition of the deemed distribution regime in 2012, and if appropriate, having regard to compliance with international standards, to consider: i) The viability of extending section 67 of the Income Tax Law to provide appropriate anti-avoidance legislation, particularly in respect of closely held investment holding companies. ii) Incentivising earlier taxable distributions. iii) Any other mechanisms to increase revenues from this source of profits, h) Recommending such consequential changes to the current Income Tax Laws as may be necessary or desirable And to report back to the States by the end of the current States’ term with proposals and recommendations. AND: B) To direct the Policy & Resources Committee to: i. Prepare the States of Guernsey Annual Budgets for 2024 and 2025 to include no real-terms growth in revenue expenditure, excepting the budget of the Committee for Health & Social Care; and ii. Include proposals within the Government Work Plan 2023 to reprioritise initiatives for which funding has not yet been released to the extent necessary to limit the additional expenditure to deliver these initiatives over the remainder of this term to a maximum of £5.7m, being 1% of the 2023 General Revenue budget AND: C) In Phase 2, following at least two full years of operation of the new CIT to direct the Policy & Resources Committee to review the effect on Guernsey’s public finances of the implementation of Phase 1, and report back to the States with any recommendations for further measures, if any, needed to address any remaining fiscal deficit, before 31 December 2029. 3. To authorise the Policy & Resources Committee to make such funding available from the Budget Reserve as is necessary in order to enable the CITI&AC to carry out its mandate.

Vote Result

Declared Vote Vote Date
Contre 27/01/2023 16:43

Voting Breakdown

Pour Contre Ne vote pas Did not vote Absent Total
11 28 1 0 0 40


Profile photo for Bury, Tina
Bury, Tina
Profile photo for De Lisle, David
De Lisle, David
Profile photo for Fairclough, Simon
Fairclough, Simon
Profile photo for Gollop, John
Gollop, John
Profile photo for Le Tissier, Chris
Le Tissier, Chris
Profile photo for Leadbeater, Marc
Leadbeater, Marc
Profile photo for Matthews, Aidan
Matthews, Aidan
Profile photo for McKenna, Liam
McKenna, Liam
Profile photo for Parkinson, Charles
Parkinson, Charles
Profile photo for St Pier, Gavin
St Pier, Gavin
Profile photo for Taylor, Andrew
Taylor, Andrew


Profile photo for Aldwell, Sue
Aldwell, Sue
Profile photo for Blin, Chris
Blin, Chris
Profile photo for Brouard, Al
Brouard, Al
Profile photo for Burford, Yvonne
Burford, Yvonne
Profile photo for Cameron, Andy
Cameron, Andy
Profile photo for De Sausmarez, Lindsay
De Sausmarez, Lindsay
Profile photo for Dudley-Owen, Andrea
Dudley-Owen, Andrea
Profile photo for Dyke, John
Dyke, John
Profile photo for Falla, Steve
Falla, Steve
Profile photo for Ferbrache, Peter
Ferbrache, Peter
Profile photo for Gabriel, Adrian
Gabriel, Adrian
Profile photo for Haskins, Sam
Haskins, Sam
Profile photo for Helyar, Mark
Helyar, Mark
Profile photo for Inder, Neil
Inder, Neil
Profile photo for Kazantseva-Miller, Sasha
Kazantseva-Miller, Sasha
Profile photo for Le Tocq, Jonathan
Le Tocq, Jonathan
Profile photo for Mahoney, David
Mahoney, David
Profile photo for Meerveld, Carl
Meerveld, Carl
Profile photo for Moakes, Nick
Moakes, Nick
Profile photo for Murray, Bob
Murray, Bob
Profile photo for Oliver, Victoria
Oliver, Victoria
Profile photo for Prow, Robert
Prow, Robert
Profile photo for Roberts, Steve
Roberts, Steve
Profile photo for Roffey, Peter
Roffey, Peter
Profile photo for Snowdon, Alexander
Snowdon, Alexander
Profile photo for Soulsby, Heidi
Soulsby, Heidi
Profile photo for Trott, Lyndon
Trott, Lyndon
Profile photo for Vermeulen, Simon
Vermeulen, Simon

Ne vote pas

Profile photo for Queripel, Lester
Queripel, Lester

Did not vote




Hansard Table

Pour Contre Ne vote pas Did not vote Absent
Bury, Tina Aldwell, Sue Queripel, Lester None None
De Lisle, David Blin, Chris
Fairclough, Simon Brouard, Al
Gollop, John Burford, Yvonne
Le Tissier, Chris Cameron, Andy
Leadbeater, Marc De Sausmarez, Lindsay
Matthews, Aidan Dudley-Owen, Andrea
McKenna, Liam Dyke, John
Parkinson, Charles Falla, Steve
St Pier, Gavin Ferbrache, Peter
Taylor, Andrew Gabriel, Adrian
Haskins, Sam
Helyar, Mark
Inder, Neil
Kazantseva-Miller, Sasha
Le Tocq, Jonathan
Mahoney, David
Meerveld, Carl
Moakes, Nick
Murray, Bob
Oliver, Victoria
Prow, Robert
Roberts, Steve
Roffey, Peter
Snowdon, Alexander
Soulsby, Heidi
Trott, Lyndon
Vermeulen, Simon