Wednesday 31 October 2012
The Treasury and Resources Minister, Deputy Gavin St Pier, today gave the following speech in the States of Deliberation, concerning amendments to the Income Tax Law.
The Income Tax (Guernsey) (Amendment) (No. 2) Ordinance, 2012
The States Report which recommended these changes was approved by the Assembly only in May but I am happy to briefly walk Members through the legislation.
This legislation contains a number of relatively minor amendments to the Income Tax Law.
Section 2 of the Ordinance on page 13 of the Booklet updates a reference in Section 68 to the Companies Law.
Section 5 also enables online filing to become the default option for personal income tax returns and compulsory for companies.
Paper tax returns have previously been issued to all taxpayers. Following the amendment in Section 3, a notice will instead be published in "La Gazette Officielle" in January each year, notifying taxpayers of the need to complete a tax return.
As I acknowledged in May, it is recognised that not all taxpayers have access to the internet. But an individual will still be able to file a paper return and communicate with the Income Tax Office by post. Individuals will still be able to obtain a paper return from either the Income Tax Office or any number of proposed collection points around the island. And these will be promoted via a comprehensive media campaign.
Sir, when I recommended these proposals to the Assembly, I noted that my Board - which you will recall had inherited this States Report - had some reservations about the fact that no formal consultation had been held with groups representing vulnerable members of our society. I am pleased to say that the Income Tax Office has been working with the Association of Guernsey Charities and is now in the process of implementing their suggestions.
At present, the Director of Income Tax has powers that enable him to require a third party to supply him with information, without informing the taxpayer of such a request - particularly in establishing a liability to tax and in complying with obligations under international agreements.
The amendments to Section 75B in the Law contained in Sections 7 to 11 of the Ordinance, simply puts beyond doubt, that a third party may not, if required by the Director, inform the taxpayer that this information has been requested when given a reasonable opportunity to deliver the information voluntarily prior to a formal notice being issued.
The necessity for the Director of Income Tax to give a third party the option to voluntarily deliver information is removed where the recipient of the notice is a GFSC regulated entity. This is because the Department's experience is that regulated entities generally require the protection of complying under a formal notice, given a financial institution's fiduciary duty to its clients.
Finally, there is an amendment contained in Section 12 of the Ordinance which makes it clear that the late filing penalty for local trading companies with employees, may only be restricted to £50 provided the company has no income or profits in the period in respect of which the return of income is required to be delivered.
These legislative changes will make administration of the income tax system more efficient. I commend them to the Assembly.