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Multinational Corporate Income Tax (Jersey) Law 202- & Multinational Taxation (Global Anti-Base Erosion – IIR Tax) (Jersey) Law 202-

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A decision made 13 August 2024:

Decision Reference:  MD-TR-2024-611

Public

Subject: Lodging of Draft  Multinational Corporate  Income Tax (Jersey) Law  202- & Draft Multinational  Taxation (Global Anti-Base  Erosion – IIR Tax) (Jersey)  Law 202-

 

Report Title: Draft Multinational  Corporate Income Tax  (Jersey) Law 202- & Draft  Multinational Taxation  (Global Anti-Base Erosion  – IIR Tax) (Jersey) Law  202-

Public

Decision(s):

The Minister decided to request that the Greffier of the States lodge 'au Greffe' the Draft Multinational Corporate Income Tax (Jersey) Law 202- and the Draft Multinational Taxation (Global Anti-Base Erosion – IIR  Tax) (Jersey) Law 202-.

Reason for Decision(s):

In October 2021, the Organisation for Economic Co-operation and Development (OECD)/G20 Inclusive Framework issued a political statement setting out a global agreement on a 2-pillar solution to the tax challenges arising from the digitalisation of the economy – Jersey joined that political statement, alongside 136 jurisdictions.  The Pillar 2 Model Rules, released on 20th December 2021, are part of the 2-pillar solution and  were developed by delegates from all member jurisdictions of the OECD Inclusive Framework on Base  Erosion and Profit Shifting. They were agreed and approved by consensus.  The Draft Multinational Corporate Income Tax (Jersey) Law 202- and Draft Multinational Taxation (Global  Anti-Base Erosion – IIR Tax) (Jersey) Law 202- will, if approved, ensure that Jersey maintains its  political commitment made in 2023 and reaffirmed in 2024, regarding Pillar 2 implementation - to  introduce an Income Inclusion Rule and a Domestic Minimum Tax in Jersey for accounting periods  beginning on or after 1st January 2025.

Resource Implications: Implementing Pillar 2 involves the introduction of both a new top up tax and a new domestic  corporate income tax for large multinational groups of companies (MNEs) with global annual turnover  in excess of €750 million. The Pillar 2 regime will generate additional tax revenues for Jersey but it  is a substantial project that will require the development and introduction of a new Information  Technology system, as well as additional experienced international tax staff for Revenue Jersey. Funds have been allocated in the Government Plan for the cost of developing and implementing a new  Revenue Jersey Information Technology system to administer the introduction of Pillar 2 in Jersey.  Over the past few years, additional Revenue Jersey personnel and staff have been recruited to work  on the development of the Pillar 2 policy. Additional staffing will be needed in the future to support  the effective functioning of Pillar 2 compliance to the over 1,000 entities of MNE groups that will be  impacted by the introduction of Pillar 2 in Jersey.

 

Action Required: The Greffier of the States to lodge “au Greffe” the Draft Multinational Corporate Income Tax (Jersey)  Law 202- and the Draft Multinational Taxation (Global Anti-Base Erosion – IIR Tax) (Jersey) Law 202- with a request for debate in the States sitting which is scheduled to commence during October 2024.

Signature:

 

 

Signed By: Minister for Treasury and Resources

Date Signed:

 

 

Date of Decision (If different from Date Signed):

 

 

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