​​​​​​​​​​Jersey's States Assembly adopts Pillar Two Legislation
On 22 October 2024, the States Assembly unanimously adopted legislation to implement an Income Inclusion Rule (IIR) and a 15% Multinational Corporate Income Tax (MCIT) for in-scope entities for accounting periods beginning on or after 1 January 2025. ​
The IIR and MCIT tax regimes will only apply to Jersey entities of MNE Groups with more than €​750 million annual global revenues, meaning that the majority (nearly 95%) of Jersey businesses will not be in scope and will remain within the curre​nt tax system (referred to as 0/10). For entities subject to the new MCIT regime, the law follows the OECD Model Rules in computing net GloBE income and also offers a credit system to account for certain instances of double taxation.
Multinational Corporate Income Tax (Jersey) Law 2025
​Multinational Taxation (G​lobal Anti-Base Erosion – IIR Tax) (Jersey) Law 2025
Revenue Jersey will be issuing full guidance in due course and are in the meantime publishing interim guidance.​
Pillar Two Interi​m Guidance​
Affected taxpayers and their advisers can also speak co​nfidentially to Revenue Jersey officers with any questions or requests by emai​l.
​​Easy reference questions and answers for MCIT registrations
​​Multinational Cor​porate Income Tax Registration
​Who can register an in-scope MNE for MCIT in Jersey?
Article 23 (1) of the Multinational Corporate Income Tax (Jersey) Law 2025
| ​The MNE group can be registered either by:
1. The group's reporting entity or
2. The group's tax agent specifically appointed to deal with its Pillar Two MCIT requirements.
|
​I already have a tax agent, can I appoint a different agent for Pillar Two?
| ​Yes, as the MCIT is a different tax to corporate income tax, GST and Income Tax Instalment Scheme, it is required that a tax agent who is appointed to deal with MCIT matters on behalf of the group be formally appointed for MCIT matters, even if it is the same tax agent for the other taxes.
|
​Is there an example of what you need to see in the letter of authority from the MNE group for the tax agent or trust company business to act on behalf of the company for MCIT matters?
| ​There is no standard template for an agent authority letter, but the letter must include the following information:
1. It should​ be on the company letterhead (in the case of Pillar Two, this must be the reporting entity's letterhead);
2. The name of the tax agent or trust company business appointed to correspond directly with Revenue Jersey in respect of the MCIT matters of the MNE group;
3. Alongside the authority letter from the company, the tax agent or trust company business must also provide the following written confirmation:
a) disclose the name and position within the company of the signatory of the authority letter who has engaged you as agent or trust company business; and
b) Declare that you have documentary evidence to show that the signatory is authorised to direct the affairs of the company.
|
​Who is the reporting entity?
Article 8 (1) of the Multinational Corporate Income Tax (Jersey) Law 2025
| ​The reporting​ entity in relation to an in-scope MNE group is:
1. The ultimate parent entity (UPE) of the group if located in Jersey,
2. If the UPE is not located in Jersey, then the reporting entity will be the only Jersey entity that is an Intermediate Parent Entity (IPE) of the group,
3. If neither the UPE nor the IPE are located in Jersey, then the group will need to nominate a Jersey entity within the group to act as the reporting entity.
|
​How to nominate a reporting entity
Article 8 (2) of the Multinational Corporate Income Tax (Jersey) Law 2025
| ​​If the group needs to nominate a reporting entity, the nominated entity (or its MCIT tax agent) completes the MCIT registration form as the reporting entity and selects the type of reporting entity as 'Jersey entity being nominated as the reporting entity.'
Revenue Jersey will review the submission and confirm whether the nominated entity is eligible to act as the reporting entity.
|
​Are Tax Identification​ Numbers (TINs) mandatory?
| ​Yes, Jersey TINs are mandatory for all Jersey constituent entities in the MNE group.
This may include Trusts who will be required to obtain a TIN prior to the group's registration for MCIT.
|
​How do I obtain a TIN for entities in the group?
| ​​Below are links for registering different entities for a TIN:
a) Corporates
b) Foreign companies
An entity includes Partnership and Trusts if they prepare separate financial accounts.
c) To register a Partnership
d) To obtain a TIN for Trusts, please email the Trusts Mailbox at RJtrusts@gov.je
|
​​What is a Jersey constituent entity?
Article 7 of the Multinational Corporate Income Tax (Jersey) Law 2025
| ​A Jersey constituent entity of an in-scope MNE group is an entity in that group that:
a) is located in jersey; and
b) is not -
(i) an investment entity,
(ii) an insurance investment entity, or
(iii) a securitisation entity.
|
​How many constituent entities can be manually captured on the web form?
| ​You may manually enter up to 25 constituent entities on the MCIT registration form.
|
​​If I have a large number of constituent entities in Jersey, what ease of use method is available to capture the data?
| ​Groups that have more than 25 constituent entities may submit the data in a csv file, which can be uploaded on the web form. An example file showing the required format can also be downloaded​ from the webform.
|
​Is there a size limit for the csv file?
| ​Yes, the maximum entries allowed are up to 999 constituent entities with a total maximum file size of 6MB.
|
​What if a constituent entity joined the group after 31 December 2024?
| ​Provide the date the constituent entity joined the group.
|
​What if a constituent entity left the group in 2025?
| ​Provide the date the constituent entity left the group.
|
​What is required if there is a change to the registration details after registration?
| ​Any updates to the MCIT registration details should be made by emailing the Pillar 2 mailbox at Pillar2@gov.je
|
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​​​May 2024 statement on Jersey's Pillar Two implementation plan
Jersey announced on 21 May 2024 that it is following its May 2023 commitment regarding Pillar Two implementation by proceeding with plans to introduce​ an Income Inclusion Rule and a multinational corporate income tax for accounting periods, beginning on or after​ 1 January 2025.
Pillar Two implementation plan statement
May 2024 Joint Update on Pillar Two by the Crown Dependencies
On 17 May 2024, the three Crown Dependencies provided an update on their intentions to proceed with implementation of Pillar Two in their respective jurisdictions.
Joint three Crown Dependencies statement​
​​​​July 2023 Inclusive Framework Outcome Statement
The OECD Inclusive Framework met in Paris from 10 to 12 July 2023 to discuss the programme of work on the Two-Pillar solution addressing the tax challenges of the digitalising economy.
Jersey joined 137 other jurisdictions in an Outcome Statement which provides an update on the status of the Pillar One and Pillar Two workstreams.
Outcome statement on the Two-Pillar solution​
Joint statement on Pillar Two by the Crown Dependencies
On 19 May 2023, the 3 Crown Dependencies made a statement on an intended approach to implementation of the Organisation for Economic Co-operation and Development (OECD) Pillar Two global minimum tax framework for large multinational groups.
The treasury ministers of Jersey, Guernsey and the Isle of Man have jointly announced their intentions in relation to Pillar Two implementation.
Each Island intends to implement an Income Inclusion Rule (IIR) and domestic minimum tax from 2025, while continuing to monitor global implementation.
This statement gives in-scope businesses certainty in relation to the 2024 tax year.
Crown Dependencies joint statement
Local press release on the Crown Dependencies announcing agreed approach to Pillar Two Framework
Key principles to Jersey's approach
The key principles on which we have consulted industry and which guide Jersey's approach to Pillar Two are:
- our commitment to maintaining an attractive business environment, based on certainty and simplicity is unchanged
- most companies in Jersey will be outside the scope of the OECD two-pillar solution and should therefore see no change in their corporate tax rate
- Jersey would be well placed to implement GloBE if it chooses to do so, since the Island has a trusted and well-resourced tax authority administering an existing corporate tax regime
- the decision on GloBE will not be based on short-term revenue-raising considerations​
These principles are set out in our tax policy reflections paper and are still relevant.
Jersey's tax policy reflections paper on the OECD Pillars
Background on the OECD Pillars
Since 2019, the OECD Inclusive Framework has been working to address the tax challenges arising from the digitalisation of the global economy.
This work resulted in a two-pillar solution announced in October 2021, to which a political commitment was made by 137 jurisdictions, including Jersey.
Pillar One is made up of two parts, Amount A and Amount B.
Amount A concerns only the very largest multinational groups of companies which have an annual turnover exceeding €20 billion.
This pillar creates new rules about where tax is to be paid based on where the group's customers are based. Pillar One is still being developed.
The Pillar Two GloBE framework is a new set of international tax rules that will require in-scope multinational groups to pay a 15% minimum effective rate of tax in every jurisdiction in which they operate. The rules apply to groups with more than €750 million global annual revenue with an exclusion for certain investment entities, including investment funds.
The starting point for the determination of GloBE income or loss will be the group's consolidated financial accounting position, to which adjustments will be made to calculate the final defined GloBE income.
All other businesses that are below the threshold, including small and medium-sized companies and partnerships, will see no impact as they remain under Jersey's existing corporate income tax regime.
Tax Challenges Arising from the Digitalisation of the Economy - Global Anti-Base Erosion Model Rules (Pillar Two) on OECD
Jersey's approach to the Subject to Tax Rule
The Subject to Tax Rule (STTR) is part of Pillar Two​​. It is intended to ensure that double tax agreements entered into by developing countries do not prevent certain cross-border payments being taxed at rates of at least 9%.
All members of the Inclusive Framework are expected to amend their double tax agreements to reflect the STTR, if they are requested to do so by a treaty partner which is a developing country and a member of the BEPS Inclusive Framework.
This can be done either bilaterally, by agreeing a protocol to each relevant double tax agreement, or multilaterally, by signing the OECD's Multilateral Legal Instrument (MLI) implementing the STTR.
Jersey currently only has one double tax agreement with an Inclusive Framework member which is classed as a developing country for this purpose.
If asked to do so, Jersey therefore intends to implement the STTR by way of a bilateral protocol rather than the MLI.
The OECD's model STTR provision
OECD's draft Pillar One Multilateral Convention, October 2023
On 11 October 2023, the OECD published a draft of the consolidated Multilateral Convention to Implement Amount A, alongside a draft explanatory statement and a draft statement of understanding on the way in which the tax certainty process for Amount A would operate.
Between them, these document set out the current understanding of the Amount A rules, and note the areas where agreement has not yet been reached.
Discussions on the final form of Amount A are continuing.
OECD summary of the Amount A rules
Draft Multilateral Convention to Implement Amount A of Pillar O​ne
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