I have a business established outside Jersey, that is undertaking work in Jersey.
The most common tax questions asked in these circumstances are:
- will the business be taxed on any profit it makes?
- will the business or the employees have to pay local income tax or social security?
- are there any indirect taxes to consider?
- will any equipment and materials be taxed on import?
Tax and duties
Double taxation agreements
Jersey has both full and partial double taxation agreements with various countries. There is a comprehensive list under double taxation agreements.
Double taxation agreements
Rates of tax
|Company tax||0% standard rate|
|10% for regulated financial service companies|
|20% for Jersey utility and property income companies|
|Goods and Services Tax (GST)||5%|
Jersey is within the European Economic Area so import duty is only due on some direct imports from third countries. Excise duty applies to alcohol and tobacco products.
The tax year
The financial and tax year in Jersey is the calendar year, which is common across Europe.
Business income tax
Although the general rate of corporate tax is 0%, it is still important to know where business profits will be taxed. As a general rule, if the business does not set up a permanent branch or office in Jersey it is unlikely to become liable for company tax. Check with the Taxes Office for guidance if in doubt. If not within the scope of Jersey taxation, any business profit is likely to be taxable in the home country.
Personal income tax
If your business is bringing employees to Jersey, you should contact the taxes office to determine the Jersey tax position even if they are paid from outside Jersey.
You need to inform the tax office of the employees’ arrival, and provide the following information:
- name of business
- number of employees
- name of employees
- where the employee will be paid from (Jersey payroll or from outside Jersey)
- whether employees' local duties are being performed for the Jersey or non-Jersey employer
- the employees expected duration of stay in Jersey
- what (if any) accommodation is being provided
- if the employee is paying tax anywhere else
Paying personal income tax in Jersey
If an employee is performing duties in Jersey they need to register for tax. They will also need to register for social security.
How to register for income tax
How to get a social security registration card
Employers duty to deduct Jersey tax - income tax instalment system (ITIS)
Any company, individual, sole trader, partnership, trust or charity who has:
- employees who are taxable in Jersey
- Directors who are taxable in Jersey
must create an employer record with the Taxes Office.
Create a tax employer record
Goods and Services Tax (GST)
Jersey’s Goods and Services Tax (GST) is not based on EU VAT but is somewhat simpler. The rules on place of supply and reverse charge are the same, so in many cases it will not be necessary to register for GST.
The tax has fewer exempt and zero-rated supplies than EU VAT, but many features will be familiar. The GST return in particular is simpler to complete, and accounting for imports designed to be as simple as possible.
Businesses making supplies in Jersey exceeding £300,000 in any 12 months, or expecting to, must notify liability to register. Although businesses can apply for registration on-line, they first need a business tax number and should in the first instance therefore contact the GST helpdesk.
Businesses coming to Jersey to supply services, (including construction or installed goods), do not need to register for GST if their customer is registered. The customer can account for GST on the value of the supply as a reverse charge. If, however, the supplier sets up a branch or fixed establishment, this does not apply.
It is possible to register voluntarily, and for an importer this has certain advantages.
GST returns are normally quarterly, due – with any payment – by the end of the following month. They can be submitted online or in a paper form.
GST and businesses
Bringing goods or equipment into Jersey
GST is due on imported goods, accounted for in one of three ways:
- where the importer is registered for GST and is an approved trader with Jersey Customs - no payment required – simply enter the value in box five of the GST return
- approved trader only - payable to Jersey Customs within 30 days
- in all other cases - payable within three days of entry
There is relief for temporary imports, likely to cover equipment.
Applying for approved trader status is simple and allows import declarations to be made on line. Nearly all entries to GST-registered approved traders are cleared pre-arrival to avoid delays at the harbour or airport.
In many cases materials can be consigned to the customer (with their agreement), using its GST number and approved trader facility. For a longer contract it may be worth registering voluntarily and becoming an approved trader, but GST does then become chargeable to the customer.
GST incurred in Jersey
Businesses that do not make sales in GST in Jersey, but incur GST when - for example - sending staff to a trade exhibition or conference, can request a refund of this GST. From early 2010 a refund scheme was introduced, similar to that operating within the EU under the 13th Directive.
Where the business has registered for GST and is no longer required or entitled to be registered, you should notify the tax office within 30 days. The registration will then be cancelled, but any late GST on costs can be refunded on application.