In this document, we present a descriptive summary of the key features of what is proposed under the ESL.
Last year, the European Union (“EU”) Code of Conduct Group (Business Taxation) (“COCG”) investigated the tax policies of non-EU countries, including Jersey, against the concept of “tax good governance” standards on tax transparency, fair taxation and anti-BEPS measures. Although the COCG had no concerns with most of the principles of tax good governance as they relate to Jersey, Guernsey the Isle of Man and a number of other jurisdictions that subject corporate profits to zero or near zero rates or have no corporate tax regimes, they did express concerns regarding the lack of economic substance requirement for entities doing business in and through these jurisdictions.
As a result of those concerns, Jersey along with the other Crown Dependencies, made a commitment to address the concerns by the end of December 2018.
On 23 October 2018, the draft Taxation (Companies –Economic Substance) (Jersey) Law 201 –(“ESL” or “Economic Substance Law”) was lodged for debate, with a view to ensure that Jersey addresses its commitment in relation to the lack of economic substance requirement for doing business in and through Jersey.
In this document, we present a descriptive summary of the key features of what is proposed under the ESL, of which we highlight the following stages:
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