Income tax exemption can be given to charities and certain non-profit organisations (NPOs).
Charities which can apply for tax exemption
A charity, which is a company, association or trust, established in Jersey can apply for tax exemption provided it exists for one or more of the following reasons:
- the advancement of education
- the relief of poverty
- the furtherance of religion
- a purpose beneficial to the whole community
- the service of any church or chapel or any building used solely for the purpose of divine worship
Types of non-profit organisations which can apply for tax exemption
A non profit organisation (NPO) can apply for exemption provided it:
- is established solely or primarily for cultural purposes, and
- receives funds wholly or mainly from the States of Jersey in pursuance of those purposes.
Procedures for requesting exemption
In order to apply for exemption it is necessary to send to the Taxes Office a copy of the constitution, trust deed or other documentation setting out the rules under which the charity or NPO is governed. A covering letter expanding on the aims and objectives can also be useful.
If no formal document exists it will be necessary to draw a set of rules up. A sample constitution is available on the Association of Jersey Charities web site. It is important that the rules contain a provision that in the event of the charity or NPO being wound-up, the funds are distributed to another charity or NPO which has tax exemption.
Association of Jersey Charities website
How the charity or NPO is informed of the tax exemption
The Taxes Office will confirm, in a letter, exemption, under Article 115(a) of the Income Tax Law, to income tax. The letter solely confirms the income tax position and does not mean that the body or organisation is a registered charity.
Are annual accounts required?
Annual accounts are not, in most cases, required. However, the Taxes Office can request accounts at any time to ensure that income is solely being used for charitable purposes.
Charitable foundations applying for exemption
The Income Tax Law does not specifically provide for charitable foundations to be exempt. However, by concession, the Comptroller of Taxes will give exemption, under Article 115 (a), provided the foundation meets all of the following conditions:
- it is set up solely for charitable purposes,
- provides a copy of its charter
- provides a copy of its regulations, and
- submits annual accounts.
Details of GST refunds
It is possible for charities and NPOs to claim a GST refund. Details can be found on the GST section.
Charities and non-profit organisations: GST advice
Charities established in Guernsey and the UK
Charities from Guernsey and the UK can apply for exemption. A claim is made by providing a copy of the exemption letter from the relevant Guernsey / UK tax authorities.
Only charities established in Jersey can benefit from the lump sum donation scheme.