As part of Jersey’s Budget proposals for 2018, released today, Senator Alan Maclean, Minister for Treasury and Resources, has outlined key tax proposals relating to financial services companies.
Currently only companies that fall within the definition of ‘financial services company’ contained within the income tax law are subject to the 10 per cent company income tax rate. A number of companies that undertake financial services activities fall outside that definition and are subject to the standard 0 per cent company income tax rate.
The Minister proposes that the definition of ‘financial services company’ be widened so that more companies undertaking financial services activities are subject to the 10 per cent company income tax rate. These would include:
• Companies registered under the Financial Services (Jersey) Law 1998 to carry out general insurance mediation business
• Companies registered with the Jersey Financial Services Commission as a registrar
• Companies holding permits under the Insurance Business (Jersey) Law 1996
• ‘Finance companies’ – companies trading in the provision of credit/finance to customers
Increase in ISE fees
Changes are also proposed for entities registered as an International Service Entity (ISE):
• All ISE fees (with the exception of fees charged for ‘vehicles administered’ and CIF/AIF vehicles) are revalorised upwards by reference to the June 2017 RPI figure
• Entities not entitled to claim ISE status by reference to their regulatory status can claim ISE status provided they meet a series of conditions. The fee payable by these ISEs is £200; in light of the benefit of ISE status, it is proposed that the fee payable by these ISEs is increased to £500
• ISE fees payable by alternative investment fund services businesses are aligned with that payable by entities holding permits under the Collective Investment Funds Law and entities registered to carry on fund services business
• ISE regs are updated so that AIFs pay a specified ISE fee of £200, equivalent to the fee currently payable by Collective Investment Funds
• ISE fee charged to ‘managed entities’ registered exclusively as fund managers is increased so that it aligns with the fee payable by non-managed entities registered as fund managers – £3,120
To view the States of Jersey’s 2018 Draft Budget Statement in full click here