Jersey has lodged the draft Taxation (Companies – Economic Substance) (Jersey) Law 201- (the “Law”). The Law, once adopted, is intended to meet the commitment made by Jersey to address certain concerns raised by the EU Code of Conduct Group on Business Taxation (the “Code Group”) in relation to the need for relevant businesses to demonstrate economic substance in Jersey.

This briefing note summarises the key provisions of the Law and the rationale for its introduction.


  1. The Law was prepared by the Government of Jersey in consultation with industry and following dialogue with the Code Group, individual EU Member States, the EU Commission and the OECD. Similar concerns on substance were raised by the Code Group in relation to the other Crown Dependencies and Jersey has also worked closely with Guernsey and the Isle of Man in developing the Law.
  2. The new substance requirements will only apply to certain companies and will not need to be met if a company has no gross income in relation to a relevant activity carried on by it. Trusts and partnerships are out of scope (although trustees and general partners that are themselves companies may be within scope).
  3. While the introduction of statutory substance requirements is noteworthy, it is expected that current high standards in Jersey mean that most companies that will fall within the scope of the Law will be able to demonstrate that they meet such requirements.
  4. The draft Law is due to be debated by the States Assembly (Jersey’s parliament) on 4 December 2018 and is expected to take effect for financial periods starting on or after 1 January 2019. The Law, once adopted, will be administered by the Jersey Comptroller of Taxes (the “Comptroller”).
  5. Jersey, together with Guernsey and the Isle of Man, has issued a document setting out key aspects of the proposed Law and the equivalent proposed laws in those jurisdictions (the “Preliminary Guidance”). It is expected that more comprehensive guidance in relation to the practical operation of the Law will be released in due course.