Jersey, Channel Islands

Corporate - Income determination

Last reviewed - 15 January 2024

Inventory valuation

Inventory is valued at the lower of historical cost or net realisable value. The last in first out (LIFO) method is not permitted. Generally, there are no material differences between accounts prepared on a normal accounting basis and those prepared on a tax basis.

Capital gains

Capital gains are not subject to tax in Jersey.

Dividend income

Any dividends received will be dealt with under the Income Tax Law, as amended.

Under the current rules, a financial services company receiving a dividend from which tax has been deducted by another Jersey company is entitled to a tax credit. The calculation of the tax credit available to a financial services company under these circumstances has been amended so as to limit the credit to the lower of the tax deducted from the dividend or the gross dividend at the rate of 10%.

Where a Jersey company is in receipt of a dividend that is paid out of capital profits, it should be exempt from tax only if they are ‘realised’ capital profits.

Stock dividends

Stock dividends are not taxed as income.

Interest income

Interest income forms part of taxable income and is taxed at the rate applicable to the company.

Royalty income

Royalty income forms part of taxable income and is taxed at the rate applicable to the company.

Rental income

Income from Jersey real estate, including rental income, property development profits, and income from exploiting Jersey land (e.g. quarrying activities), is subject to tax at 20%.

Foreign income

Income tax is levied on foreign branch income when earned and on foreign dividends, interest, rents, and royalties. Double taxation is mitigated by either the granting of unilateral relief to the extent of taxing foreign income net of foreign taxes or by treaty relief, which gives credit for foreign tax. Concessional credit relief might be granted in certain limited circumstances upon application.

Jersey currently has DTAs with Australia, Cyprus, Denmark, Estonia, Faroes, Finland, France, Germany, Greenland, Guernsey, Hong Kong, Iceland, Isle of Man, Liechtenstein, Luxembourg, Malta, Mauritius, New Zealand, Norway, Poland, Qatar, Rwanda, Seychelles, Singapore, Sweden, the United Arab Emirates, and the United Kingdom. The scope varies from agreement to agreement, but most are of limited scope.