Introduction
The States of Jersey's Comptroller of Revenue is withdrawing the temporary concession that it issued in March 2020 in relation to the application of Economic Substance and Corporate Tax Residency Requirements during periods where government imposed travel restrictions (including those in other jurisdictions) were in place in light of the Covid-19 pandemic (the "Covid-19 Concession"). The Covid-19 Concession will be withdrawn for accounting periods commencing on or after 1 November 2022. The withdrawal is not retrospective.
Our briefing on Economic Substance Requirements in Jersey can be found here and a link to the Comptroller's Covid 19 Economic Substance and Corporate Tax Residency Concession can be found here, as further clarified by the Comptroller in 2021 - see note here.
Walkers comment
The Covid-19 Concession was always a temporary measure, and now that travel restrictions have been lifted in most jurisdictions it is not surprising that the Covid-19 Concession is being withdrawn.
It is welcomed that the withdrawal applies to accounting periods commencing on or after 1 November 2022, as this allows businesses to plan ahead to ensure compliance with Economic Substance Requirements, and means that the Covid-19 Concession will continue to apply for current accounting periods (although businesses should look to be holding board meetings in Jersey now that travel restrictions have generally lifted).
Businesses should be reminded that under the Covid-19 Concession it was expected that Covid-19 measures only impact the ability of a company (and now a partnership) to comply with the directed and managed requirement. It was still expected that a company (and now partnership) would continue to meet the other economic substance requirements, including the "core income generating activities" requirement.
About Walkers' Channel Islands regulatory team
Walkers' Channel Islands regulatory team is fully equipped to provide bespoke, privileged legal advice and guidance in connection with all aspects of the Channel Islands' regimes for economic substance. We have a team of regulatory experts spanning all practice areas who regularly advise on all aspects of Jersey and Guernsey regulation, including economic substance, tax, FATCA, CRS, financial services, AML, sanctions, and data protection.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
