The Government of Jersey has published a consultation paper seeking feedback on proposed economic substance requirements for companies that are tax resident in Jersey.
The proposals set out in the consultation would allow the island to meet the commitments made in 2017 to the EU Code of Conduct Group on Business Taxation.
This consultation follows many months of internal preparations, involving engagement with industry representatives, Jersey Finance and the Jersey Financial Services Commission.
It has also involved external dialogue with representatives of the EU Code of Conduct Group, OECD officials, and the EU Commission in order to obtain clarity on the EU’s expectations.
The high-level proposals in the paper would allow the Tax Department to identify companies carrying out 'relevant activities' – including banking, insurance and fund management – and impose substance requirements on them, which may include having physical offices and employees based in Jersey.
Those requirements could then be enforced through a series of measures. including fines and ultimately striking a company from the register.
Senator Ian Gorst, Minister for External Relations, who oversees financial services, commented: “The consultation represents the latest step in the evolution of the island’s international tax policy – and maintains our longstanding commitment to tax neutrality and transparency, and that regulated financial institutions have a real physical presence in the island. We strongly welcome input from industry practitioners and members of the public on these proposals.”
• Responses to the consultation can be sent via email to tax.policy@gov.je