Jersey To Change ISE Fees For Trusts
Monday, October 22, 2012
The Jersey government is seeking industry input on improving the fairness of the island's International
Services Entities (ISE) regime, in a public consultation
launched on October 17, 2012.
The ISE regime was introduced in parallel to Goods and Services Tax (GST) in 2008 as an alternative to GST registration for businesses that mainly serve non-residents. It was
primarily created to raise revenue from businesses in the financial services
industry while helping to reduce the administrative and compliance burden that
GST would place upon them. Businesses that meet certain conditions can become
an ISE if they pay an annual fee. That fee varies depending on the type of business.
The latest Green Paper follows a review in 2011, during which
the government consulted businesses on the ISE regime, in part to
achieve greater equity between the ISE fees charged to different kinds of businesses.
The government reported that this exercise made it clear that businesses in Jersey value the ISE regime and
consider that, on the whole, it achieves its aims of collecting revenue with
a minimum of cost and complexity. However, respondents also considered that
ISE fees are proportionately greater in some sectors than others, particularly
for trust companies.
Introducing the latest consultation paper, the island's Minister for Treasury and
Resources, Philip Ozouf, explained: “The ISE regime was developed to
raise revenue whilst minimizing the compliance burden on companies that are
primarily exporters. It is important that the regime is seen to be fair for
the businesses involved."
He added: “Respondents to the 2011 consultation said most aspects of the ISE system are
working well, but trust companies felt that charges could be made more equitable.
This Green Paper explores ways of doing that. I would encourage all affected
businesses and interested parties to respond to the Green Paper in order to
ensure that their views are heard.”
The annual fees payable by ISEs have been increased twice in the past two years,
and now raise a total of GBP9.3m (USD15m) for island coffers. The government hopes to
make revenue-neutral changes, and the consultation specifically considers options for amending the fee structure for trust companies so the current
“basic” GBP7,500 fee element is replaced with scaled charges that better reflect
the size of the business in question. Clarification of who is liable to pay the GBP200 “vehicle” element of the trust
company fee is another aim of the consultation exercise.