
Taxation
(Companies – Economic Substance) (Amendment No. 2)
(Jersey) Law 202-
A LAW to further amend the Taxation
(Companies – Economic Substance) (Jersey) Law 2019.
Adopted
by the States 10th February 2021
Sanctioned
by Order of Her Majesty in Council [date to be inserted]
Registered by the Royal Court [date to be inserted]
Coming into force [date to be inserted]
THE STATES, subject to the sanction of Her Most
Excellent Majesty in Council, have adopted the following Law –
1 Amendment of the Taxation
(Companies – Economic Substance) (Jersey) Law 2019
This Law amends the Taxation
(Companies – Economic Substance) (Jersey) Law 2019[1].
2 Article 3 (meaning of relevant activities) amended
After Article 3(2)
there is inserted –
“(3) For
the purposes of paragraph (1) the following are not relevant
activities –
(a) business conducted by a
collective investment fund (as defined in the Collective Investment Funds
(Jersey) Law 1988[2]);
(b) business conducted by a
fund that would be a collective investment fund were it not for the offer of
units in the fund not being considered to be an offer to the public (as
construed in accordance with Article 3 of the Collective Investment Funds
(Jersey) Law 1988).”.
3 Article 5A inserted
After Article 5
there is inserted –
“5A Requirement for self-managed fund to meet
economic substance test
(a) applies to a self-managed
fund that is a resident company;
(b) applies to a financial
period that commences on or after 1st January 2021; and
(c) has effect despite
Articles 3(3) and 5.
(2) A
self-managed fund must satisfy the economic substance test.
(3) A
self-managed fund meets the economic substance test if –
(a) having regard to an
activity carried on in Jersey –
(i) there are an adequate number of employees
in relation to that activity who are physically present in Jersey (whether or
not employed by the self-managed fund or by another entity and whether on
temporary or long-term contracts),
(ii) there is adequate expenditure
incurred in Jersey, and
(iii) there are adequate
physical assets in Jersey;
(b) all of the self-managed
fund’s core income-generating activities are carried out in Jersey; and
(c) if any core
income-generating activities are carried out in Jersey for the self-managed fund
by another entity, the self-managed fund is able to monitor and control the
carrying out of that activity by the other entity.
(4) The
Comptroller may issue guidance on how the economic substance test may be met,
including without prejudice to the generality of the foregoing, any expression
used in this Article for the purpose of that test, including the meaning of
“adequate”.
(5) Regard
must be had to any guidance under paragraph (4) concerning the
interpretation of any expression.
(6) The
Comptroller may revise guidance issued under paragraph (4) from time to
time and a reference to guidance includes a reference to revised guidance.
(7) Guidance
issued under paragraph (4) must be published by the Comptroller in a
manner which the Comptroller considers will bring it to the attention of those
most likely to be affected by it.
(8) In
this Article –
“certified fund”, “collective
investment fund”, “recognized fund” and “unclassified fund” have the same
meanings as in the CIF Law;
“CIF Law” means the Collective Investment Funds (Jersey) Law 1988[3];
“self-managed fund” means any of the following funds to which a
separate manager has not been appointed –
(a) a certified fund;
(b) a collective investment
fund;
(c) a recognized fund;
(d) an unclassified fund;
(e) a fund that would be a
collective investment fund were it not for the offer of units in the fund not
being considered to be an offer to the public (as construed in accordance with
Article 3 of the CIF Law).”.
4 Citation and commencement
This Law may be cited as
the Taxation (Companies – Economic Substance) (Amendment No. 2)
(Jersey) Law 202- and comes into force 7 days after it is registered.