6. Taxation

a. General

There are no capital gains, estate or inheritance taxes in Jersey. A goods and services tax was introduced on 6 May 2008 at the rate of 3 per cent but does not apply to non-resident international business.

Formerly, non-resident owners of Jersey companies were able to apply for exemption from liability to tax in Jersey and to pay a flat-rate fee of GBP600. That flat-rate fee was discontinued at the end of 2008. From 1 January 2009 all Jersey companies are zero-rated unless they are resident financial services businesses, in which case a 10 per cent rate of tax applies. As part of the EU Tax Package and Code of Conduct on Business Taxation, Jersey will phase out International Business Companies by 2011.

The Jersey standard rate of income tax is 20 per cent (including resident partnerships and trusts with resident beneficiaries) and has remained at a rate unchanged for over 60 years. Trusts are not taxable in Jersey provided that the settlor and beneficiaries are not resident in the island.

In response to the EU Tax Package, Jersey has introduced withholding tax arrangements for EU residents receiving interest income. The recipients may choose either to have income information provided to the tax authorities of their country of residence or to pay Jersey withholding tax. In common with most other offshore financial centres, Jersey has entered into a number of tax information exchange agreements.

During 2009 Jersey was included on the ‘white list’ approved by the G20 jurisdictions.

b. Resources

i. Legislation

Income Tax (Jersey) Law 1961

Good and Services Tax Law 1997

ii. Website

Income Tax Office

© 2012 Society of Trust & Estate Practitioners