Jersey: companies regarded as resident in Jersey

A copy of the Finance (2016 Budget) (Jersey) Law 201- has been published on the Jersey Law website, following its adoption by the States: see here. An amendment is being made to Article 123 ("Bodies corporate") of the Income Tax (Jersey) Law 1961 in order to change the test used to determine if a company is resident in Jersey. Under the current law, a company incorporated under the Loi (1861) sur les Sociétés à Responsabilité Limitée or the Companies (Jersey) Law 1991, will be resident in Jersey for tax purposes unless (a) its business is centrally managed and controlled outside Jersey in a country or territory where the highest rate at which any company may be charged to tax on any part of its income is 20% or higher; and (b) the company is resident for tax purposes in that country or territory. The amendment will replace 20% with 10%, and is clearly driven by the downward trend in corporation rates, including in the United Kingdom where it was announced in the Summer Budget 2015 that rates will fall to 19% in 2017 and 18% in 2020.