FAQs on International Services Entities
What is an ISE? An international services entity (“ISE”) is an entity that is listed as an international services entity by the Comptroller of Income Tax or by a trust company business that the Comptroller of Income Tax has authorized to maintain a list ISEs. Supplies made by an ISE are not taxable supplies (i.e. an ISE is not required to register and will not charge GST on supplies it makes). An ISE is also entitled to end user relief – in most situations other GST registered businesses will not charge GST on supplies made to the ISE.
An entity that ceases to be listed will cease to be an ISE.
What types of businesses can be treated as ISEs?
Banks, trust company businesses, fund services business and fund functionaries that are approved by the Comptroller can be included on the list of ISEs maintained by the Comptroller (but cannot be included on a list maintained by a trust company business). Collective investment funds, unregulated funds and companies, partnerships and trustees of trusts that, loosely speaking, do not form a link in a value chain leading to consumption of goods or services by individuals resident in Jersey can be included on a list maintained by a trust company business (or a list maintained by the Comptroller).
Can a business be registered for GST and be an ISE?
No. The ISE scheme is an alternative to GST registration for businesses that primarily serve non residents and that would otherwise bear an administrative overhead that is disproportionate to the tax collected.
If I do not want to be an ISE can I register for GST in the normal way?
Yes. If your taxable turnover exceeds £300,000 and you do not register as an ISE, you must register for GST. If your taxable turnover is below £300,000 you may be able to apply for a voluntary registration.
What is the consequence of not registering as an ISE?
- You will not be eligible for End User Relief, so you will therefore be charged GST on all standard-rated supplies received from a GST registered business.
- If you make taxable supplies to the value of £300,000 or more per annum, you will be liable to register for GST and will need to keep all the associated books and records. You will need to consider the administrative implications of this. In particular you should bear in mind that:
a) if you make exempt services, you will be a partially exempt trader and will need to make an annual adjustment in respect of input tax incurred in the making of exempt supplies made.(however see (b) below
b) if you make certain exempt supplies (Schedule 5 , Grp 1) to recipients outside Jersey, the input tax directly attributable to these supplies can be reclaimed
c) if you make supplies of services under contract to a recipient not belonging in Jersey, these supplies will be zero-rated (Schedule 6)
d) if you receive services from outside Jersey, where the recipient of the supply is in Jersey, the services will be subject to a reverse charge (Schedule 3)
What does entity mean in relation to ISEs?
Article 60 of the Law sets out the conditions that an entity must satisfy to be eligible for listing as an ISE. In this context an entity may be a body corporate, a trustee (in the trustee’s capacity as a trustee of one or more trusts satisfying the conditions), a partnership (including a limited partnership and a limited liability partnership), an Anstalt, Stiftung, or foundation, a collective investment fund or an unregulated fund.
What does vehicle mean in relation to ISEs?
A vehicle is an entity (other than a trustee) that, loosely speaking, is administered by a trust company business. The number of vehicles administered by a trust company business determines the listing fee payable by the trust company business if it elects for ISE treatment.
What must I do to be listed as an ISE?
An eligible entity can apply to the Comptroller via the Income Tax business to business website (www.jsytax.je). The fee payable for listing will be determined automatically. For further details see the Tax Information Sheet for the Financial Services Industry which can be downloaded from the website.
An eligible entity (other than a bank, trust company business, funds service business or fund functionary) can also be listed by a trust company business that administers that entity if the trust company business has been authorized to maintain a list.
If I provide Company Secretary services to businesses outside Jersey do I need to count these in the number of vehicles?
Yes. A trust company business providing company secretarial services to a company is administering the company for the purpose of Part 12 of the Law. The company will be eligible (and therefore a vehicle for the purpose of calculating the trust company business listing fee) if it satisfies the conditions set out in Article 60. Those conditions do not depend on the place of establishment of the company.
In calculating the fee payable, do I have to include all the vehicles I administer?
No. You should include only those vehicles eligible for ISE status, unless they have listed and paid the fee in their own right. There is no fee payable in relation to Trusts
If I register as an ISE what must I do to stop suppliers charging me GST?
When the Comptroller lists an ISE he will issue an End User Relief Certificate. The ISE should inform its suppliers that it is entitled to end user relief and can furnish the certificate in support of this. If the ISE has authorised the Comptroller to include the ISE on the Comptroller’s website the supplier can further verify that the entity is entitled to end user relief.
An ISE listed by a trust company business will not be issued with an End User Relief Certificate by the Comptroller. However a GST registered supplier making a supply to an ISE may rely on written confirmation by the trust company business that the entity has been listed by the trust company business.
Are there any exceptions to the end user relief available to an ISE?
Yes.
- Businesses using a retail scheme (under Article 43(1) of the Law), are not required to remit tax on supplies with a value of less than £1000. – However, ISE’s can reclaim this GST from the States by submitting a claim form to the ITO.
- Goods supplied to an ISE for onward supply in the same state in Jersey are not remitted from tax. GST incurred on any such supplies cannot be reclaimed form the States.
If a supplier charges me GST can I claim it back?
If an approved ISE incurs GST (other than for goods for onward supply in the same state in Jersey) it can recover the tax by submitting a claim form to the Income Tax Office.
You can access the ISE Refund Aplication from this site.
