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Taxation (Companies – Economic Substance) (Amendment No. 2) (Jersey) Law 2021

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                       26th May 2021

Registered by the Royal Court                                                        28th May 2021

Coming into force                                                                                  4th June 2021

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

(1)     This Article –

(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 2021 and comes into force 7 days after it is registered.


[1]                                     L.3/2019

[2]                                     chapter 13.100

[3]                                     chapter 13.100

Page Last Updated: 28 May 2021