2018 company tax return guidance notes

​Section 1: General instructions 

In section 1, the return asks you to respond to questions about the status of the company and also to state the profits of the company. You're required to answer yes or no where applicable, and also enter figures for profit and loss in the appropriate section(s). 

Submitting your company's financial statements 

You must submit a copy of your financial statements together with a tax computation if the company is a large corporate retailer or is in receipt of profits and gains taxable at either the 10% corporate tax rate or the 20% standard tax rate.

You must also state the amount of the company's tax adjusted profit or loss for the year of assessment in the appropriate section. An estimate is not acceptable. 

If the company is subject to tax at the rate of 0%, does not have ultimate Jersey beneficial owners and is carrying on trading activities through a permanent establishment in Jersey then you must submit a copy of your financial statements. 

You must also state the amount of the company's accounting profit or loss for the year of assessment in the appropriate section. An estimate is not acceptable. 

Please forward your accounts by post as these cannot be submitted online with your 2018 tax return. 

Section 1.1: Companies subject to 0% corporate tax rate 

Most companies will fall under this category.

For example investment holding companies, J-Category property holding companies and trading companies that are not financial services companies. 

Large corporate retailers 

If the company is a large corporate retailer you should complete section 1 as follows: 

• no to 1.1 'The company is subject to the 0% corporate tax rate' 
• yes to 'The company is a large corporate retailer' 
• enter the actual (not an estimate) amount of tax adjusted profit / loss in the box
  
• complete the remaining parts of section 1 as appropriate
• complete sections 2-6 as appropriate 

Large corporate retailers guidance notes

Registered shareholders 

The shareholders referred to on the company tax return are the shareholders whose names and addresses are in the share register of the company. 

Ultimate beneficial owners of the company 

You are required to declare whether or not any of the ultimate beneficial owners of the company who own more than 2% of the ordinary share capital are resident in Jersey. 

The legal definition of an ultimate beneficial owner of a company includes:

• direct ownership of shares
• ownership of shares through a company or a series of companies
• ownership of shares through a trust or a series of trusts
• ownership of shares through a structure that may include companies or trusts 

Share transfer property holding company 

If any registered shareholders or ultimate beneficial owners of the company are Jersey resident and the company's investment income (after management expenses) is less than £100 or nil per shareholder, the company secretary must complete the return as follows:

• yes to section 1.1 'The company is subject to the 0% corporate tax rate'
• yes to 'Is the company a share transfer property holding company and had no income or income of less than £100 per shareholder for the year of assessment'
• complete the remaining parts of section 1 as appropriate
• section 1 (1.9) where there are ultimate beneficial owners resident in Jersey enter '0' 
• section 6 Economic substance select 'none of the above' and nature of activity (other) select 'non-income producing asset holding company' 

Trading activities through a permanent establishment 

This question will only display for companies that are taxed at 0% and have no Jersey beneficial owners with more than a 2% shareholding. 

If the company is carrying on trading activities through a permanent establishment in Jersey, an additional question at section 1.10 will appear. 

The interpretation of 'permanent establishment' can be found at Article 3 of the Income Tax Law.

If the company is not carrying on trading activities through a permanent establishment in Jersey, an additional question at section 1.11 will appear. 

Section 1.2: Financial services company subject to the 10% tax rate 

To be within the definition of a financial services company, a company must have a permanent establishment in Jersey. 

Furthermore a company will also be within one or more of the descriptions below. A number of the definitions are based on the requirement to register or hold a permit by virtue of various Laws administered by the Financial Services Commission. 

The following entities are the ones to which the 10% corporate rate of tax apply:

• all regulated entities carrying out banking business through a Jersey company, through a branch or through some other structure
• all regulated entities carrying on the business or trade of trust business
• all regulated entities carrying on investment business, independent financial advice and similar activities
• all regulated entities carrying on fund services as administrator, custodian or registrar
• certain entities carrying on general insurance mediation business
• certain entities holding permits to carry on insurance business
• entities which are trading in the provision of credit facilities to customers 

The full definitions of financial services company are contained in Article 123D(4) of the Law.

Actual tax adjusted profit or loss 

Enter the actual amount (not an estimate) of the company's tax adjusted profit or loss for the year of assessment. 

Section 1.3: Income from land, property, property development, quarrying in Jersey subject to the 20% tax rate 

This includes all income from:

• land
• property
• furnished letting
• lodging houses
• property development
• quarrying and similar activities in Jersey only

The fact that a company receives income subject to tax at 20% does not alter the category of company under which the company falls (ie the company itself can still be a 0% / 10% or 20% company).

Actual profit or loss 

Enter the actual amount (not an estimate) of the profit or loss for the year of assessment.

Section 1.4: Income from the importation or supply of hydrocarbon oil subject to the 20% tax rate 

This includes companies that are involved in the importation, supply of oil into Jersey or both. 

Actual profit or loss 

Enter the actual amount (not an estimate) of the profit or loss for the year of assessment.

Section 1.5: Utility company subject to the 20% tax rate 

Utility companies include water, electric, gas and telecoms. 

Actual profit or loss 

Enter the actual amount (not an estimate) of the profit or loss for the year of assessment.

Section 1.6 Annuity company which incorporates an approved self-administered retirement annuity contract 

This includes private pension companies. You must send in a copy of the financial statements to us as soon as they are available. 

Section 1.7 Intermediary services vehicle company 

A company which receives a payment from a client in respect of services rendered by an individual, who is a member of the company and under arrangements which were it not for the interposition of that company, the relationship would be one of employer and employee. 

Section 1.8 Incorporated in Jersey but its business is centrally managed and controlled abroad, is tax resident abroad and pays foreign tax of 10% or more 

This includes Jersey registered companies, managed and controlled in the UK or elsewhere. The company must state the country in which it is centrally managed and controlled and treated as tax resident. 

Section 1.9: Company subject to tax on income under schedule D at the rate of 0% 

Reporting of company profits or gains subject to 0% rate of tax

If any of the ultimate beneficial owners of the company that are resident in Jersey own more than 2% of the ordinary share capital of the company you are required to declare the tax adjusted profits or gains for the year of assessment which are subject to tax at 0%. 

For example:

The tax adjusted profits or gains of the company is the amount of income chargeable to tax after the deductions, reliefs and allowances the company is entitled to claim under the Income Tax Law. 

For the avoidance of doubt the deductions, reliefs and allowances does not include credits for double taxation / unilateral relief or credits on dividends.

1.10 Companies trading in Jersey (where ultimate beneficial owners of the company are resident outside of Jersey) 

If the company is a Jersey registered company, you're required to declare the accounting profit / loss (before tax) for the accounting period(s) ending in the year of assessment. You are also required to upload a PDF copy of your financial statements when submitting the return. 

If the company is a non-Jersey registered company trading through a permanent establishment, declare the Jersey branch profit / loss (before tax). You are also required to upload a PDF copy of the financial statements in respect of your branch or permanent establishment. 

The full amount of the accounting profit / loss should be entered in the section even if the company has declared income in the sections 1.3 or 1.4. 

Where declarations are made in the sections 1.3 or section 1.4 in addition to section 1.10, the financial statements, Jersey tax computations and any other supporting documents should be uploaded in PDF format. 

1.11 Companies not trading in Jersey (where ultimate beneficial owners of the company are resident outside of Jersey) 

The company is required to declare the accounting profit/loss (before tax) for the accounting period(s) ending in the year of assessment. 

The full amount of the accounting profit/loss (before tax) should be entered in section 1.11 even if the company has declared income in either section 1.3 and / or section 1.4. 

Where the company has declared income in either section 1.3 and / or section 1.4 then the company is required to submit the financial statements and Jersey tax computation. 

If the company is declaring the accounting profit / loss in section 1.11 only then is the company not required to submit the financial statements. 

Section 2: Shareholder details

Relevant accounting period(s) relating to the company's year of assessment 

If the financial period does not end in the year of assessment (e.g. the first financial period ends in a subsequent year of assessment) you must state this in section 5 and give details of when the first or next financial period will end. 

Please enter '0' when required to enter profit/loss figures under Section 1. 

Total number of allotted shares in the ordinary share capital of the company 

Enter the number of shares. 

No Jersey resident shareholders owning more than 2% of the ordinary share capital of the company 

This question will only appear if there is no requirement to complete the shareholder question in section 1.1. 

If there are no Jersey resident shareholders owning more than 2% of the ordinary share capital of the company then tick the box provided and move on to section 3. 

Shareholding of the company has remained exactly the same 

If the details of the company shareholding has remained exactly the same from the previously submitted company tax return then answer yes in the box provided and move on to section 3. 

If there have been changes to the shareholding then answer no and provide full details of the shareholders. 

Details of Jersey resident shareholders 

You must provide details of all individuals with a Jersey address in the share register of the company who held more than 2% of the ordinary share capital at any time during the financial period ending in the year of assessment. 

You must provide:

• the full name and address of each individual as stated in the share register
• the tax reference number (if known)
• the total number of ordinary shares held by each individual during the financial period and also the period they were held 

Legal entity with a Jersey address in the share register 

You are only required to provide the names and addresses of companies or other legal entities as stated in the share register if the ordinary share capital of the company was during the financial period ending in the year of assessment held by companies or other legal entities with a Jersey address in the share register. 

Individual or legal entity not having a Jersey address in the share register 

You do not have to provide any details in respect of shareholders who are:

• individuals who did not have a Jersey address in the share register of the company
• companies or other legal entities which did not have a Jersey address in the share register of the company
• individuals with a Jersey address in the share register of the company who held 2% or less of the ordinary share capital of the company for the whole of the financial period ending in the year of assessment (or if this is the first company tax return that company has been required to complete, for the whole of the time up to completing this company tax return) 

Registered shareholder (nominee company) 

If all the registered shareholders are nominee companies, then the company secretary only needs to enter the name(s) of the nominee(s) in section 2. Details of the relevant accounting period(s) and the total number of allotted shares are not required. 

Registered shareholders (individuals acting as bare nominees) 

If all the registered shareholders are Jersey residents acting as bare nominees then the company secretary must enter the names of the bare nominees (eg A N Other as bare nominee) in section 2. Details of the relevant accounting period(s) and the total number of allotted shares are not required. 

Registered shareholders (trustees of a non corporate Jersey trust) 

If the registered shareholders are the trustees of a Jersey resident trust then the company secretary must enter the names of the trustees (eg A.N Other as trustee of the XYZ Trust) in section 2. 

Additional information relating to non resident beneficial shareholders 

A company secretary may voluntarily provide in section 5 information detailing the ultimate non resident beneficial ownership of the ordinary share capital of the company eg the registered shareholder of the company is ABC Nominees Jersey Ltd but the ultimate beneficial owners of the company are all non resident. 

To do this, complete the following:

• tick yes in both boxes of section 1.1
• enter the name and address of the Jersey nominee company or Jersey trustees in section 2 (eg A N Other as trustee of the XYZ Trust) or bare nominees (eg A N Other as bare nominee)
• include note confirming ultimate ownership is entirely non resident in section 5
• complete the declaration in section 6

Section 3: Distributions made in the year of assessment 

If the answer to Section 3 (c) is 'yes', the company is required to enter the particulars of the Jersey resident recipient(s) of the distributions. The details that must be reported are:

• name of the beneficial recipient of the distribution
• address of the beneficial recipient of the distribution
• tax reference of the beneficial recipient of the distribution (if known)
• amount of the distribution (currently there is no obligation on the company to analyse the distribution between amounts taxable under schedule DIX and schedule DIII)

There is no obligation to report details of distributions made to non-Jersey residents. 

All of the details that need to be reported in Section 3 of the company tax return should be available to the company as a consequence of the information it is obliged to provide directly to the Jersey resident beneficial recipients of distributions. 

For more information about the meaning of a distribution, see taxation of company distributions.

Section 4: Payment made after deduction of Jersey tax 

Enter any payment made by the company from which Jersey tax has been deducted, for example a payment made to a Jersey charity under the lump sum donation scheme. 

Section 5: Other information 

Provide any other information in support of the return or declarations made. 

Section 6: Economic substance and nature of activities

Sub-section 1: Economic substance

The relevant activities are defined within the Taxation (Companies – Economic Substance) (Jersey) Law 2019. 

Where a company is carrying on more than one category of relevant activity and the descriptions do not give guidance as to the appropriate activity to select, then you should select the activity which the company predominantly carries on unless this includes high risk intellectual property holding in which case you should select intellectual property holding (high risk). 

Banking business 

Any company which has a banking licence from the Jersey Financial Services Commission (JFSC). 

Insurance business 

Any insurance company with a permit under category A or category B (this does not include insurance brokers). 

Fund management business 

Any business which is regulated by the JFSC in respect of managing a fund or any business managing a fund which would be regulated by JFSC but for the fact the fund is not a public fund. 

Finance and leasing business 

Any business which has an activity of providing any amount of credit or financial leasing to any other person, with the intention of receiving consideration in return. 

Where a company is also carrying on banking, insurance or fund management activities then select those categories of activity rather than finance and leasing business. 

Headquarters business 

Any activity where a company advises on or controls material risks of a connected business, or provides senior management, usually in return for management fees. 

Where a company is also carrying on banking business, insurance business, finance and leasing business or intellectual property holding business select one of those categories of activity rather than headquarter business. 

Shipping business 

Activities involving the operation of ships outside of Jersey's waters, except where the ship is a fishing vessel, pleasure craft or small ship. 

Holding company business 

Any company which is the parent of other group companies where such holdings is its primary business and does not conduct other commercial activities. 

Intellectual property holding business (other) 

Is the business of holding of intellectual property and earning income from licence fees, royalties or similar. If the company's activities are within the description of high risk intellectual holding business then select intellectual property holding business (high risk). 

Intellectual property holding business (high risk) 

Is the business of holding intellectual property where the company is not carrying on research and development or distribution activities in Jersey, or the intellectual property was acquired from a connected party and subsequently leased or similar to a connected party. 

Distribution and service centre business 

Is the business of either purchasing of goods etc. from a foreign connected party and then the resale of the same goods, or the provision of services to a foreign connected party as its business. 

Where a company carries on distribution and service centre business and another category of relevant activity then select the other category of activity. 

None of the above 

If the company does not carry on any of the categories of relevant activity included in sub-section 1 then select 'none of the above'. This will take you to sub-section 2 'Nature of activities'. 

Sub-section 2: Nature of activities (other) 

Where a company is not carrying on a relevant activity then the company should select one of the categories of activity from sub-section 2. 

Select the appropriate activity if the company met the applicable definition at any time during the financial period(s) which ends in the year of assessment. 

Where a company is carrying on more than one category of activity in sub-section 2 then select the activity which is predominantly carried on by the company in the financial period(s) which end in the year of assessment. 

Trading through a permanent establishment in Jersey 

Trading companies include all companies that are not investment holding, non-income producing asset holding or dormant companies (see below). 

Trading companies that carry on an active business of, for example, buying or manufacturing goods for the sole purpose of selling the goods to third parties, typically independent persons.

They also include companies that provide a service, such as provision of advice or staff to third parties. Companies that predominantly provide services (eg management services, treasury services) to connected parties / entities within the same corporate group should select trading ­group services company. 

A permanent establishment includes a branch of the company, a factory, shop, workshop, quarry or a building site, and a place of management of the company, but the fact that the directors of a company regularly meet in Jersey shall not, of itself, make their meeting place a permanent establishment.

A company which has an undertaking in Jersey (within the definition of Article 25 of the Control of Housing and Work (Jersey) Law 2012) / obtained a license from the Population Office would be regarded as having a permanent establishment in Jersey. 

Companies engaged in property development in Jersey should also be included in this category. 

For the avoidance of doubt, holding companies of trading companies should not report their activity as trading but rather as investment holding. 

Trading: group services companies 

A company has predominantly provided services (e.g. management services, treasury services) to connected parties/entities within the same corporate group. For the avoidance of doubt it is irrelevant whether the company has a permanent establishment in Jersey. All group services companies should be included in this category. 

Trading: other 

A company that is a trading company as described above but has not carried out any of that trading activity through a permanent establishment in Jersey and does not fall within the category trading -group service company. 

Investment holding 

A company that does not carry on a trade, nor did it fall to be non-income producing asset holding or dormant in accordance with the definitions below. 

These companies typically hold assets such as equities, real property and debt receivables and receive the following types of income:

• dividends and other similar distributions from shares, securities, stock, bonds, unit trust, and other similar investment instruments
• interest and income equivalent to interest, including amounts received in lieu of interest
• rental income and other forms of funds from holding real estate Retirement annuity companies approved under Art 131B of the Income Tax Law should be included in this category. 

Non-income producing asset holding company 

A company holding assets with no intention of exploiting those assets for short term income, profit or gain. 

An example would be ownership of property where there is no intention of letting that property for income, developing the property or disposing of the property as part of a trade. Share transfer property holding companies would select this option.

Dormant 

A company had no significant accounting transactions and is not within definition of non-income producing asset holding. Significant transactions do not include:

• filing fees paid to the Jersey Financial Services Commission
• penalties for late filing of a tax return
• consideration received on the issuance of shares

Dormant companies and other exceptions

Dormant company with no income

If any registered shareholders or ultimate beneficial owners of the company are Jersey resident, the company secretary must complete the company tax return as follows:

• tick each of the boxes as appropriate in sections 1.1 to 1.8
• where there are ultimate beneficial owners resident in Jersey enter '0' in section 1.9
• complete section 2
• in section 5 indicate that the company is dormant
• complete the declaration in section 6 

Collective investment funds 

Do not complete a tax return if the company is a collective investment fund under the Collective Investment Funds (Jersey) Law 1988. 

Charities 

Do not complete a company tax return if the company's income has been granted exemption from income tax because it has been set up in Jersey for charitable purposes. 

Applying for charity tax exemption

Foreign incorporated companies managed and controlled in Jersey

You can file a global return for 2018 if the ultimate ownership of the company doesn't include any Jersey residents.

Global tax return for foreign companies (GRFIC) guidance notes

For 2019 returns you must file a corporate return.

Corporate tax returns