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Internationally owned businesses operating in the Channel Islands

Internationally owned businesses

The impact of the BEPS initiative

The impact of the BEPS initiative

Guernsey and Jersey may not be obliged to adopt any of the BEPS measures but nevertheless almost every sector in the Channel Islands including banking, fiduciary, investment fund management, private equity, real estate and trading groups will feel the impact of the BEPS initiative. 

Interest deductions

Specifically on interest deductibility, companies with intra-group financing arrangements will need to assess the impact if the recommended rules to restrict interest deductions were to be introduced by a relevant jurisdiction.

Permanent Establishments

The proposed far reaching changes to the definition of Permanent Establishment (PE) may affect Channel Island structures which, uses third parties to undertake the substantial negotiation and subsequent performance of the contract. Investment managers with distribution agents and banks and trust companies that use relationship managers in other jurisdictions will need to be concerned about creating PEs, which could result in tax payment and filing obligations arising from the PE.

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