DEPUTY Prime Minister Nick Clegg has again refused to endorse the Zero-10 rates of corporate tax in the Isle of Man and the Channel Islands.
He was speaking at a press conference held at the end of the British-Irish Council summit in London on Monday, which was attended by three Isle of Man ministers.
Mr Clegg avoided giving an official blessing to Zero-10 when he responded to a question about whether he supported the zero rates of corporate tax adopted in the Crown dependencies.
When asked whether there were any lessons that could be learned from the Crown dependencies, Mr Clegg stressed that the three islands had a different fiscal status.
“The key thing is that while competitiveness in taxation undoubtedly can be a good spur to creating environments for greater economic growth, you must have proper transparency and accountability within [which] tax systems operate.”
At the last British-Irish Council summit - held in the Isle of Man in December last year - Mr Clegg has told offshore financial centres that the government is determined to stamp out ‘perverse incentives’ that let individuals and businesses avoid paying tax.
Speaking in the Isle of Man, Mr Clegg refused to go as far as saying that some Crown Dependencies are tax havens. He also rejected describing them with ‘artificial’ terms.
The clear message from his meeting with the Isle of Man government and financial leaders was Britain is keen to do away with any schemes that hint of tax evasion.
Mr Clegg said that the UK government would promote and defend the Crown dependencies as long as they operate within the rules of the European Union and do not give any financial incentive to investors to evade their taxes.
His statement in December was seen as veiled encouragement to the Isle of Man and Jersey to negotiate an end to the controversial ‘zero-10’ corporation tax dispute with the European Union. Guernsey has already indicated changes to tax rules to come in to line with the EU over ‘Zero-10’.
The Isle of Man has deliberately held back from making any decisions regarding Zero-10. Economic Development Minister Allan Bell - formerly the Treasury Minister - has said on a number of occasions that the Isle of Man “will not be bullied into making a hasty decision.”
