Economic Substance Update No.5
Economic Substance Updates. No.5
Updates on Legislation
The Taxation (Companies- Economic Substance)(Jersey) Law 2019 completed the legislative process when it cleared the Privy Council and was sanctioned by Her Majesty on 13th March 2019, and registered at the Royal Court on 22nd March 2019.
On 10th April 2019 the Minister for External Relations lodged an amending Law, the draft Taxation (Companies- Economic Substance)(Amendment)(Jersey) Law 201-, to be debated in June 2019.
This amending Law is part of the ongoing process agreed with the Code of Conduct Group which saw Jersey ‘white listed’ on the 12th March.
It makes minor amendments to clarify that any Core Income Generating Activities of a company within the scope of the economic substance test are conducted in Jersey. The amendments also ensures the Law will now also meet the newly introduced OECD’s Forum for Harmful Tax Practice (FHTP) global standard for substantial activities, for example by extending the scope of possible information exchange beyond EU Member States, and onto a global basis.
The proposed amending Law will be debated in advance of the June FHTP meeting scheduled to discuss the legislation in jurisdictions considered to be no or only nominal tax jurisdictions, including Jersey.
The other Crown Dependencies will be revising their legislative provisions on a similar basis in due course.
Update on Guidance Notes
The guidance notes to be jointly issued with the other Crown Dependencies will be released shortly. In order to maintain our standing as a co-operative and transparent jurisdictions we have shared these guidance notes with both the EU Commission and the secretariat of the OECD’s FHTP before publication. It is currently envisioned that their publication will be at on the 26th April.