Crown dependencies set out joint approach to tax reforms 

The three crown dependencies have jointly agreed to implement the 15% global minimum corporate tax rate in response to the OECD's Pillar Two rules. 

Isle of Man treasury minister Alex Allinson met with Ian Gorst, Jersey's minister for treasury and resources, and Mark Helyar, Guernsey's deputy chief minister and treasury lead to reach the agreement.

The new rules will comprise the implementation of an ‘Income Inclusion Rule' and a domestic minimum tax to provide for a 15% effective tax rate for large in-scope multinational enterprises, from 2025, ensuring certainty for businesses in each of the three jurisdictions.

The joint statement said: "The islands will continue to work together, monitoring implementation internationally and adapt accordingly to developments which may require adjustments to our own implementation plans, and remain committed to continuing to offer attractive and globally competitive investment environments.

"The islands will continue to engage with diverse and widespread stakeholders - across a very broad range of sectors and geographies - to gather further information and to provide appropriate notice to allow businesses to prepare for these changes.

"Our islands have well-established and stable corporate income tax systems, and longstanding and independently assessed track records of meeting international standards. We are proud of our global leadership in tax cooperation, combatting money laundering and countering the financing of terrorism, and in providing appropriate and effective transparency."

Isle of Man's Allinson said: "The Treasury has taken time to engage extensively with relevant businesses and stakeholders and is pleased to announce the joint approach for the Isle of Man alongside the other Crown Dependencies. The Isle of Man, like Jersey and Guernsey, is well-placed to adopt these international tax reforms because of its existing corporate income tax system, but it is still important we allow enough time to ensure these planned changes are right first time.

"Today's announcement is intended to assist large multinational businesses with group turnover of more than €750 million in preparing for these changes. It also presents the opportunity to remind the majority of Isle of Man companies that the new rules will not apply to them and that they remain within the Island's established 0/10% tax regime."

Guernsey's Helyar said: "Guernsey has consistently championed the need for a level playing field in tax cooperation and we have a long track record of maintaining the highest standards in tax transparency and fairness. In its implementation of the OECD Pillar Two initiative, Guernsey wants to provide certainty and stability for businesses in the island.

"As the rest of the world is looking at how to respond to the OECD's global initiative to establish a globally applied minimum effective rate for corporate tax, it is significant that Guernsey, Jersey and the Isle of Man are in lock step about the approach to implementation. We will continue to work together as it becomes clear about how the rest of the world will act on Pillar Two.

"This will ensure that Guernsey remains competitive while staying at the forefront of emerging global norms in tax matters."

Jersey's Gorst said "careful engagement with industry at home and around the world" would ensure Jersey maintained its internationally competitive reputation.