{"id":43518,"date":"2018-11-08T13:26:38","date_gmt":"2018-11-08T13:26:38","guid":{"rendered":"https:\/\/www.taxresearch.org.uk\/Blog\/?p=43518"},"modified":"2018-11-08T13:26:38","modified_gmt":"2018-11-08T13:26:38","slug":"jerseys-guidance-on-the-eus-economic-substance-test-spectacularly-misses-the-point","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2018\/11\/08\/jerseys-guidance-on-the-eus-economic-substance-test-spectacularly-misses-the-point\/","title":{"rendered":"Jersey’s guidance on the EU’s economic substance test spectacularly misses the point"},"content":{"rendered":"

I have been asked to comment on the new guidance Jersey has published for companies that are resident in the island\u00a0and which may be impacted by its new economic substance test. That document notes that the reason for this test is as follows:<\/p>\n

\"\"<\/a><\/p>\n

I have highlighted the phrase that is critical, in my opinion. The EU was not just asking Jersey to consider the economic substance requirements for entities doing business in Jersey; it was also asking them to consider the economic substance requirements of entities conducting trade through Jersey. In my opinion (and it is, of course, only an opinion)\u00a0 any company incorporated in Jersey is conducting trade through the jurisdiction even if it is not economically resident there. What else can 'through' mean when 'in' clearly means 'resident'?<\/p>\n

The guidance issued says:<\/p>\n

\"\"<\/a><\/p>\n

I have, again, highlighted the key text. Jersey is\u00a0 only issuing guidance for companies that are resident\u00a0 in Jersey,\u00a0 and not for those that trade through it, and yet we know that only\u00a0 13% of jersey incorporated companies are resident in the island, with the rest being resident 'elsewhere', with Jersey admitting they have no idea how that is determined or where 'elsewhere' might be.<\/p>\n

The guidance does not come close to offer guidance on how residence is determined. Nor does it suggest what disclosure is required by non-resident companies. And it does not say what\u00a0evidence will be expected to prove that non-resident companies are resident elsewhere\u00a0- which is a key issue to the EU in tackling offshore tax abuse. After all, this is what its whole case against Apple is about.<\/p>\n

In that case, my comment is quite straightforward: this guidance note as spectacularly\u00a0misses the point of the EU's intention as the draft legislation\u00a0does, and will not prevent Jersey (and Guernsey and the Isle of Man, if they follow\u00a0suit) joining the EU tax haven blacklist.<\/p>\n","protected":false},"excerpt":{"rendered":"

I have been asked to comment on the new guidance Jersey has published for companies that are resident in the island\u00a0and which may be impacted
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4,6,7],"tags":[],"class_list":["post-43518","post","type-post","status-publish","format-standard","hentry","category-guernsey","category-isle-of-man","category-jersey"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/43518","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=43518"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/43518\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=43518"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=43518"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=43518"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}