The Island of Sark is probably the only true remaining "Fiscal Paradise" in the world and the ideal island for anyone who requires, or desires absolute seclusion. The benefits of Sark were not created to encourage newcomers to the Island but simply to enable residents to live a normal and unrestricted life. Sark is not in any way connected with the other Channel Islands. Indeed, it has fought off vigorously all attempts by the States of Guernsey to legislate for it. Sark is completely self-governed and privately owned. All laws concerning the administration and political following of the Island are made in it's own Parliament known as 'Chief Pleas', the decisions of which cannot be disputed or challenged.
'Simply, the Constitution is a mixture of feudal and popular government with its Chief Pleas (parliament), consisting of 40 tenants and 12 popularly elected deputies, presided over by the Seneschal (L. P. de Carteret). The head of the island is the Seigneur (J. M. Beaumont). Sark has no income tax. Motor vehicles, except tractors, are not allowed.' (Courtesy of The Stateman's Yearbook, 2000).
Most other so called "Tax Havens" e.g. Guernsey, Jersey, Isle of Man etc., have reciprocal Tax Arrangements with the United Kingdom and most other countries in the world. Sark has no such arrangements, indeed, there is no Tax, Tax Man or Tax Office on the Island of Sark! The Island has no income, capital gains or inheritance taxes. It raises most of it's revenue from a poll tax on visitors to the Island and the Impot, a tax on alcohol and tobacco purchased here. Neither does it have any reciprocal tax or disclosure of information agreements with anyone. Communications are excellent with some of the most sophisticated telephone systems and postal facilities in the world.
Sark is neither in the EU nor out. There is no VAT and many businesses can be run without having to register for or charge it. Furthermore, Sark has no company register. Companies registered in tax-free jurisdictions can have their business addresses on Sark and trade from there. In such a way, the company remains unincorporated in Sark but its trade is not restricted to one jurisdiction.
The "Sark Lark" & The Dame of Sark
Several years ago the island of Sark burst into the newspaper headlines when its hereditary Seigneur, The Dame of Sark, miffed over the use of agriculture tractors despite her ban on the use of autos, threatened to sell the island to Guernsey. Her threats were opposed by most of Sark residents, as such a sale would have subjected residents to Guernsey's "local income tax# (20% rate). As it turned out, the Dame eventually dropped the proposal to the relief of many. Since the demise of the Dame her successor Seigneur Mr. Michael Beaumont has officially pledged to keep Sark free from taxes.
During the era of the Corporation Tax Companies, Sark played an important role in how business affairs were carried on in the Channel Islands even though Sark has only two banks (the Bank of Westminster and Midland Bank) with but one bank employee each. Under the old CTC law, the annual director's meetings had to be held outside of Guernsey and Jersey.
To comply with the management restriction under the old CTC law, thousands of Jersey and Guernsey CTCs appointed Sark directors and held board meetings in Sark or in nearby French towns. It was estimated that 20% to 40% of Sark's population of 600 had been acting as CTC directors for fees of between £100 to £200 a year per company. Husband and wife teams were earning £10,000 a year, and a few families were pulling in over £100,000 a year.
The use of a "Sark lark" (director) came under increased criticism by the administrative authorities because Sark has no company law or financial services regulatory body. To end the criticism, the Channel Island authorities decided to abolish the CTC legislation altogether and replace it with a brand-new law. (Courtesy of New Providence Press: Tax Havens of the World).
Update: The Island of Sark is part of the Bailiwick of Guernsey and is answerable to the States of Guernsey. In fact recently the States of Guernsey has enacted legislation to close down various tax avoidance loopholes in Sark & Sark companies pay a registration fee to the FSC (Financial Services Commission) in Guernsey. Sark is owned by the Island of Guernsey and is leased under a Royal Charter to the various inhabitants called 'tenements'. Guernsey also has jurisdiction for law and order on Sark and the police have full legal powers in Sark, (once they have been granted permission to enter onto Sark soil by the Seigneur.
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