Jersey, Channel Islands
Resident companies are generally taxed on their worldwide income. A permanent establishment (PE), e.g. a branch of a company, is taxed on profits attributable to the PE. Non-resident companies are taxable on Jersey real estate income.
Companies are liable to income tax at a rate of 0%, 10%, or 20% on taxable income. The general rate applicable is 0%; the 10% and 20% rates apply to certain companies/income streams as explained in this section. The tax rate applies to the company as a whole, the only exception being Jersey-source real property income, which is taxed at 20% regardless of the classification of the real property holding company.
Certain Collective Investment Funds and Securitisation Vehicles can elect to be exempt from tax on income, other than income from Jersey land or property, for an annual fee of GBP 500.
The 20% tax rate applies to Jersey-based utility companies, such as telephone, gas, and electricity companies. Additionally, 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%. Companies involved in oil importation and supply are also taxed at 20%.
The 10% rate applies to Jersey financial services companies. A company is defined as a financial services company, under Article 123D of the Income Tax (Jersey) Law 1961, if:
- It is registered under the Financial Services (Jersey) Law 1998 to carry out investment business; trust company business; or fund services business as an administrator, custodian or registrar in relation to an unclassified or unregistered fund; or general insurance mediation business as described in either class P or class Q in Part 3 of the Schedule to the Financial Services (Financial Service Business) (Jersey) Order 2009;
- It is registered under the Banking Business (Jersey) Law 1991;
- It holds a permit under the Collective Investment Funds (Jersey) Law 1988 as an administrator, registrar or custodian;
- It holds either a Category A or Category B permit under the Insurance Business (Jersey) Law 1996; or
- It is a company trading in the provision of credit facilities to customers by way of making any advance or granting of any credit including (but not limited to):
- the provision, in connection with the supply of goods by hire purchase, leasing, conditional sale or credit sale, of credit in instalments for which a separate charge is made and disclosed to the customer, and
- any assignment to the company of an advance or credit repayable by the customer to a person other than the company.
Large corporate retailers have been brought into scope of the standard 20% income tax rate with effect from 1 January 2018. A 'large corporate retailer' is a company that meets the following tests:
- 60% of its trading turnover is from retail sales to customers in Jersey, and
- retail sales to customers in Jersey are equal to or greater than GBP 2 million per annum.
'Retail sales' will not include wholesale supplies or the provision of services.
Where the taxable profits of a 'large corporate retailer' are less than GBP 500,000 per annum, the company is subject to tax at 0% on all of its profits.
Where the taxable profits of a 'large corporate retailer' are GBP 750,000 or more per annum, the company is subject to tax at 20% on all of its profits.
Where the taxable profits of a 'large corporate retailer' are more than GBP 500,000 but less than GBP 750,000 per annum, a tapering provision will apply. The effect of the tapering provision for 'large corporate retailers' with taxable profits of between GBP 500,000 and GBP 750,000 per annum is to reduce the effective rate of tax on a sliding scale from 0% up to 20%.
The 0% rate applies to all entities that are not exempt, financial services entities, large corporate retailers, or utility companies, including fund managers who do not hold any of the permits mentioned above.
Local income taxes
There are no parish or local government taxes on income.