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| NEWS CENTRE |
| Sales Tax in JERSEY? |
THE BACKGROUND
A 3% “Goods and Services Tax” (GST) has been introduced in Jersey with effect from 1st May 2008. The 3% rate will not be increased for at least three years and will be charged on all services and goods (including imports), unless they are excluded specifically by legislation.
In addition to the 3% standard-rate, there are also zero-rated supplies and exempt supplies. Businesses will register for GST in Jersey when their taxable supplies there exceed the limit in any 12 month period. Registered businesses will recover GST on purchases and charge GST on sales, completing a seven-box quarterly return.
There are various detailed rules, from general laws on record-keeping, thresholds, invoice-presentation and time-limits; to more specific laws, such as retail schemes, or the relief from GST when goods under a certain value are imported into Jersey by post or courier.
INTERNATIONAL SERVICE ENTITIES
Most significant is the law exempting from GST Registration any business registered as an International Services Entity (“ISE”). Banks, trust company businesses and fund services business can all be ISE Registered, though the government imposes a significant charge for registration.
Supplies made by an ISE are not taxable supplies, so an ISE will not be required to register for or charge GST. However, this would result in ISEs not being able to recover GST on its purchases, so an ISE is also entitled to “End User Relief” whereby suppliers will not charge GST to ISEs. It will therefore be necessary in most cases for GST Registered businesses to identify ISE Registered customers (there are rules on how to do so) and to ensure that supplies to such customers are treated separately for GST purposes.
If you have any queries or need assistance in understanding whether your business should be registered, either for GST or as an ISE, please do not hesitate to contact us.
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