In a recent blog we highlighted how #TimeIsTicking in terms of organisations in the Channel Islands being ready to discharge their 2019 corporate tax filings before the impending deadlines.
Having spoken with a number of organisations it has become clear that a notification obligation introduced on 1 January 2019 is not as well-known as it should be, considering the financial penalties for getting it wrong.
Non-Jersey incorporated companies – notification obligation
From 1 January 2020, a non-Jersey incorporated company that becomes resident in Jersey by virtue of its management and control being located in the Island has an obligation to notify the Comptroller of that fact within 6 months or else face a penalty of up to £3,000. Until recently there was no standardised process for discharging that notification obligation, with companies being requested to write to Revenue Jersey providing “relevant information” – which required the author of the letter to have a working understanding of Art 123AA of the Income Tax Law.
Pleasingly Revenue Jersey have now sought to standardise the process, with the release of a form which can be posted (perhaps less pleasing) or emailed (see here). For completeness, non-resident companies which operate in such a way that they establish a potential liability to Jersey tax also have a notification obligation under the same provision.
On the basis that BVI incorporated, Jersey tax resident companies are a familiar sight within the finance industry, the release of this form provides us with an opportunity to remind you of this notification obligation, which (if missed) can result in material penalties. We would recommend that organisations which utilise non-Jersey incorporated companies develop appropriate processes to ensure that this notification obligation is discharged with the 6 month timeline – KPMG in the Channel Islands can help you to develop these processes, as well as helping with all your broader corporate filing obligations in both Jersey and Guernsey, reducing the demand on your internal resources and managing your risk profile. If you would like to discuss further, please contact your usual contact within KPMG in the Channel Islands or Paul Eastwood.