Friday, October 10, 2014
Guernsey's 2015 budget includes proposals to double exempt company fees, freeze personal income tax allowances, and increase the property tax.Under the budget, the exempt company fee would rise to GBP1,200 (USD1,945) – the first such increase since 1998. If adopted the measure will take effect from January 1, 2015.
A ten percent increase is proposed for the commercial tax on real estate. The tax on the retail sector will rise by a lower five percent.
Following a recommendation from the Policy Council's Fiscal and Economic Policy Group, as part of the 2013 Budget Report, the States agreed to extend the company intermediate income tax rate, of ten percent, to licensed fiduciaries (in respect of regulated activities), licensed insurers (in respect of domestic business), and licensed insurance intermediaries and licensed insurance managers (in respect of the carrying on of business and acting as such) with effect from January 1, 2013. It is now proposed that the company intermediate income tax rate, of 10 percent, should be extended to the provision of administration services (as defined under the Protection of Investors (Bailiwick of Guernsey) Law, 1987), to unconnected third parties (that is, excluding principal managers).
Last, personal income tax allowances will remain unchanged.
The Minister for Treasury and Resources, Gavin St Pier, said: "This Budget will do three things: confirm that our financial house is now finally in order, as we move out of deficit and stop spending more than we earn for the first time in six years; move us from short-term budgeting to long-term planning; and, enable us to invest in our economy and in our islands' infrastructure."
"Sustainability, fairness, and efficiency are at the heart of this budget," he said.
The budget proposal will be debated at the end of this month.