HL Deb 21 May 2002 vol 635 cc90-1WA
Lord Pearson of Rannoch

asked Her Majesty's Government:

Further to the Written Answer by the Lord McIntosh of Haringey on the 1 May (WA 99), whether the Channel Islands and the Isle of Man are free to maintain their existing tax regimes. [HL4265]

Lord McIntosh of Haringey

The Government would like the Channel Islands and the Isle of Man to amend their tax regimes to incorporate the principles in the EU Code of Conduct on Business Taxation and adopt the same measures as those in the draft EU Directive on Savings.

Lord Pearson of Rannoch

asked Her Majesty's Government:

Further to the Written Answer by the Lord McIntosh of Haringey on 1 May (WA 99), whether they have made any assessment of the effect on the economies of the Channel Islands and Isle of Man if the latter were to accept the tax package adopted by ECOFIN and if other regimes did not accept a similar package. [HL4267]

Lord McIntosh of Haringey

Agreement of the draft Directive on Savings is conditional on sufficient reassurances being received that key third countries will adopt equivalent measures. The effect on the economies of the Crown dependencies of adopting the principles of the Code of Conduct on Business Taxation would depend on the nature of the tax changes introduced to replace the current harmful features.

Lord Pearson of Rannoch

asked Her Majesty's Government:

Further to the Written Answer by the Lord McIntosh of Haringey on 1 May (WA 99), whether they have considered what measures they might apply to the Channel Islands or the Isle of Man if the latter do not accept the tax package adopted by ECOFIN; and, if so, what are those measures. [HL4268]

Lord McIntosh of Haringey

The Government hope that the Crown dependencies will all remove the harmful aspects of their tax regimes and agree to adopt the same measures as set out in the draft Directive on Savings. To protect the UK tax base, the Finance Bill includes the reserve power to bring within the charge to tax under the controlled foreign companies (CFC) legislation all CFCs that are located in overseas jurisdictions where harmful practices continue to be prevalent.