Ministers have welcomed the decision of the States Assembly to unanimously adopt legislation to implement a Pillar 2 Income Inclusion Rule and a multinational corporate income tax from 2025.
This legislation fulfils Jersey’s commitment to enact the OECD’s global minimum tax framework for large in-scope multinational groups.
For accounting periods starting on or after 1 January 2025, in-scope Jersey companies and branches of multinational groups will pay an effective rate of 15% on their Jersey profits under the new Multinational Corporate Income Tax (MCIT). Jersey’s MCIT applies the OECD Model Rules and takes account of certain instances of double taxation.
Jersey will also impose a top-up tax on low-taxed profits outside of the Island under the OECD’s Pillar 2 Income Inclusion Rule (IIR) but will not apply the Undertaxed Profits Rule (UTPR).
Jersey has a long-standing corporate income tax regime and Revenue Jersey is well resourced to deal with the roll out of Pillar 2. Over 95% of Jersey companies will be unaffected by this Pillar 2 legislation and will remain within the existing Jersey income tax regime.
Jersey’s Minister for Treasury & Resources, Deputy Elaine Millar (pictured), said: “The Government is committed to providing an internationally competitive business environment in Jersey and is working with industry and the Jersey Financial Services Commission in a tri-partite Ministerial Working Group. One of the outcomes will be a new Pillar 2-compliant Qualifying Refundable Tax Credit (QRTC) regime. This regime will be effective in incentivising business growth and deepening business ties with Jersey.
“Jersey is committed to providing taxpayers with the tax certainty they need and the highest standards of customer service. We will be keeping the Pillar 2 administrative burden in Jersey as low as possible, within the boundaries of the OECD global rules.”
Jersey’s Minister for External Relations, Deputy Ian Gorst, added: “The passing of this legislation maintains Jersey’s reputation as a forward-thinking jurisdiction that is fully aligned with international tax initiatives developed by standard-setting bodies like the OECD. I am confident that Jersey is well positioned to implement this new Pillar 2 regime and maintain a globally competitive business environment for our taxpayer customers worldwide.”
