Economic substance legislation in the Crown Dependencies and Overseas Territories—summary
Economic substance legislation in the Crown Dependencies and Overseas Territories—summary

The following Private Client practice note provides comprehensive and up to date legal information covering:

  • Economic substance legislation in the Crown Dependencies and Overseas Territories—summary
  • Background
  • Main legislative principles
  • Core income generating activities
  • Distribution and service centre business
  • Financing or leasing business
  • Fund management business
  • Banking
  • Insurance
  • Shipping
  • More...

Economic substance legislation in the Crown Dependencies and Overseas Territories—summary

STOP PRESS: The OECD Forum on Harmful Tax Practices (FHTP) has confirmed that the 12 jurisdictions it considers as having 'no or only nominal' business tax regimes have all now set up a legal framework requiring companies to make economic substance reports. The FHTP now plans to impose annual compliance monitoring of the substance rules. For more information, see: OECD delivers on tackling harmful tax practices, as a further set of preferential tax regimes are dismantled or tightened (BEPS Action 5).

The Crown Dependencies of Jersey, Guernsey and the Isle of Man, and the Overseas Territories of Bermuda, Cayman Islands and British Virgin Islands, have all introduced new legislative economic substance requirements for companies and other entities with a presence in their respective jurisdictions.

The legislation is effective for accounting periods commencing on or after 1 January 2019.

Background

In 2016, the EU Council committed to co-ordinated policy efforts in the fight against tax fraud, evasion and avoidance and adopted the ‘conclusions on criteria and process leading to the establishment of the EU list of non-cooperative jurisdictions for tax purposes’.

Consequently, the EU Code of Conduct Group (Business Taxation) (COCG) were instructed by the EU Council to undertake a screening process whereby jurisdictions, including the Crown Dependencies, were assessed against three standards in respect of:

  1. tax transparency

  2. fair taxation, and

Popular documents