Jersey has tabled a draft ‘Taxation Companies Economic Substance Law’, designed to satisfy the economic substance’ test applied to the EU’s tax havens blacklist of jurisdictions.
Jersey has tabled a draft ‘Taxation Companies Economic Substance Law’, designed to satisfy the economic substance’ test applied to the EU’s tax havens blacklist of jurisdictions.
In December 2017, the Code of Conduct Group identified possible concerns about the absence of legal requirements to ensure adequate economic substance in the Island, although Jersey was categorised overall as a cooperative jurisdiction.
Following consultation, the law establishes new tests for certain tax-resident companies carrying on ‘relevant activities’ to demonstrate that they are ‘directed and managed’ in Jersey, and that their ‘core income generating activities’ are undertaken in Jersey. Enactment is expected to take place before the end of this year, and the law will come into force on 1 January. The Jersey government has said it will publish guidance on the operation of the new law by 5 November.
Jersey’s minister for external relations, Senator Ian Gorst, commented: ‘I am delighted that Jersey is the first jurisdiction to lodge new legislation to meet the concerns on economic substance expressed by the EU Code of Conduct Group on Business Taxation’.
Jersey has tabled a draft ‘Taxation Companies Economic Substance Law’, designed to satisfy the economic substance’ test applied to the EU’s tax havens blacklist of jurisdictions.
Jersey has tabled a draft ‘Taxation Companies Economic Substance Law’, designed to satisfy the economic substance’ test applied to the EU’s tax havens blacklist of jurisdictions.
In December 2017, the Code of Conduct Group identified possible concerns about the absence of legal requirements to ensure adequate economic substance in the Island, although Jersey was categorised overall as a cooperative jurisdiction.
Following consultation, the law establishes new tests for certain tax-resident companies carrying on ‘relevant activities’ to demonstrate that they are ‘directed and managed’ in Jersey, and that their ‘core income generating activities’ are undertaken in Jersey. Enactment is expected to take place before the end of this year, and the law will come into force on 1 January. The Jersey government has said it will publish guidance on the operation of the new law by 5 November.
Jersey’s minister for external relations, Senator Ian Gorst, commented: ‘I am delighted that Jersey is the first jurisdiction to lodge new legislation to meet the concerns on economic substance expressed by the EU Code of Conduct Group on Business Taxation’.
