Jersey, Channel Islands
Goods and services tax (GST)
The standard rate of GST is 5%.
Companies with taxable supplies of more than GBP 300,000 per annum are required to register for GST.
International service entity (ISE) status
To address the difficulty of irrecoverable input tax in the financial services sector, and to mitigate the administrative cost of GST for exporters in general, Jersey has introduced the concept of an ISE. Where an entity qualifies for this status:
- it will not be required to register for GST
- services to it will be zero-rated (i.e. treated as an export) where the supply exceeds GBP 1,000, and
- input tax on purchases of less than GBP 1,000 may be reclaimed.
ISE status is automatically available to a wide variety of service providers and administered entities based in Jersey, upon application and payment of the relevant fee, including licensed banks, licensed trust service providers, licensed fund administrators, fund managers, and managed managers.
Other entities not automatically eligible under one of the categories above, including companies, partnerships, trusts, unrecognised funds, and special purpose vehicles, may still obtain ISE status if they fulfil certain criteria.
The ISE may, at the election of the company, be included on a list maintained by the Comptroller of Taxes. The list will refer either to the entity itself or (e.g. for administered entities) a class of entities as submitted by the administrator.
A common customs tariff is applicable on all goods imported from outside the European Union. The amount is dependent on what the goods are and where they are imported from.
An excise duty tax is payable on imported items, such as alcohol, tobacco, and fuel, at varying rates.
There are no property taxes in Jersey apart from income tax on Jersey-source property income, stamp duty on Jersey real estate, and rates levied by each parish.
Stamp duty is payable on the purchase or transfer of Jersey real estate, with varying rates. Mortgages secured by a charge over Jersey real estate are subject to stamp duty at rates of up to 0.5% of the amount borrowed. No stamp duty is payable on the transfer of shares.
Land transaction tax
A land transaction tax applies when shares in companies are transferred and the ownership of which confers a right of occupation of residential real estate in Jersey. The amount of land transaction tax payable is equal to the stamp duty that would have been suffered if the real estate were held directly.
Employers are required to deduct tax from salaries paid to employees and remit this to the tax authority to settle the employees’ tax liability. Under the Income Tax Instalment System (ITIS), the tax authority issues each employee with an effective rate notice to pass to their employer indicating the deduction rate. If no such notice is provided, the default rate of deduction applied is 20%.
Social security contributions
Employers are responsible for paying employer social security contributions at a rate of 6.5% on each employee’s gross earnings, up to the monthly standard earnings limit of GBP 4,442 for 2019 (GBP 4,558 from 1 January 2020). Employer social security contributions of 2% apply to employees’ earnings above the standard earnings limit, up to an upper earnings limit of GBP 14,686 monthly (GBP 20,800 from 1 January 2020).
A long-term care fund has been set up to help those who need long-term care.
Income taxpayers pay into this fund with a long-term care contribution. Those not liable for income tax do not have to pay the contribution.
The maximum long-term care contribution rate was 1% from 2017 of total income (taking into account allowances and reliefs), but it's likely that one’s rate will be less than the maximum.
Long-term care contributions are capped at 1.5% of the upper earnings limit for 2020 (upper earnings limit is GBP 20,800).