New legislation introduces minimum corporate tax model in line with international standards
The Government of Jersey has approved new legislation this week (22 October) that will pave the way for the jurisdiction to implement a minimum multinational corporate income tax from 2025.
The move is part of Jersey’s commitment to enact the OECD’s global minimum tax framework for large multinational groups – commonly referred to as Pillar 2.
It means that, as from 1 January 2025, in-scope Jersey companies and branches of multinational groups – those with global revenues of more than EUR750m - will pay an effective rate of 15% on their Jersey profits. At the same time, a number of other mechanisms have also been approved to ensure the smooth roll-out of the new model, in line with international requirements.
Critically, the Pillar 2 model will only apply to a small number of multinationals with entities in Jersey – according to official figures, over 95% of Jersey companies will be unaffected by the new legislation. They will remain within the existing Jersey income tax regime, which is not changing.
Approval of the legislation comes after Jersey, together with Guernsey and the Isle of Man, jointly committed to adopting the OECD Pillar 2 model last year.
Commenting on the new legislation, Angela Morris, Head of Corporate – Jersey at Suntera Global, said:
“This new legislation has been in the pipeline for some time, with the Crown Dependencies having jointly announced their intention to implement the OECD Pillar 2 model last year, and is fully expected. Whilst the legislation is significant in terms of signposting Jersey’s commitment to adhering to international standards, crucially, it only impacts a very small number of multinational ‘in-scope’ companies. The vast majority of corporate entities in Jersey will see no impact and will continue to operate under existing tax rules.
“Overall, this should send a strong message to the international community that Jersey remains a highly reputable, certain and globally competitive jurisdiction for businesses.”
Further information and the Government of Jersey’s official press release can be found here.
Key Contact:
HEAD OF CORPORATE - JERSEY