You will recall that in May 2024, the Government of Jersey released a statement on its intended implementation of the Organisation for Economic Co-operation and Development’s (OECD) Pillar Two global minimum tax framework for very large multinational groups. This statement explained Jersey would implement Pillar Two in the form of an Income Inclusion Rule (IIR) and domestic minimum tax called the Multinational Corporate Income Tax (MCIT) from 2025.
It should be noted that in the context of very large multinational groups, it will only impact those with consolidated group annual turnover exceeding €750 million. Consequently, all other businesses that are below the annual turnover threshold will see no impact and will remain under Jersey’s existing corporate income tax regime.
On 14 August 2024, Jersey lodged its draft legislation with the intent that the law will be effective for fiscal years beginning on or after 1 January 2025.
- Proposition P.53/2024: The Draft Multinational Taxation (Global Anti-Base Erosion – IIR Tax) (Jersey) Law 202- (IIR)
- Proposition P.54/2024: The Draft Multinational Corporate Income Tax (Jersey) Law 202- (MCIT)
These new, draft pieces of legislation, create additional tax administration and understanding the application of the rules can be complex. We would recommend that those impacted by the draft legislation reach out to their tax advisors to ensure the implications of these rules are understood both domestically and how they interact with other jurisdictional rules on Pillar Two.
Please click here for further details Guernsey released on its plans to introduce Pillar Two rules on 21 May 2024, which includes the intention to implement an IIR and introduce a Qualifying Domestic Minimum Top-up Tax (QDMTT) with effect from 1 January 2025. Engagement has been undertaken with the local business community through a targeted questionnaire on some specific design elements of the proposed QDMTT. Legislation and guidance is expected in due course ahead of the implementation of these rules from 1 January 2025, with the exact publication date yet to be announced.
If you have any questions, or would like to discuss any of the areas covered in our summary in more detail, please don't hesitate to get in touch with your usual PwC contact or one of the below directly.
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