The OECD Forum on Harmful Tax Practices (FHTP) has concluded that the domestic legal frameworks of Guernsey and Jersey are in line with agreed standards and therefore "not harmful". This latest endorsement follows the approval by the EU Code of Conduct Group of the substance regimes of both jurisdictions in March 2019.
The results released on 23 July 2019 form part of the FHTP's ongoing review of the domestic law regimes of low tax jurisdictions with regard to preferential tax regimes and the OECD substance legislation standards agreed in November 2018, which require that the core income generating activities for certain highly mobile sectors of business activity must be conducted with qualified employees and operating expenditure in the jurisdiction. The FHTP has reviewed 287 regimes since the start of its BEPS Project and in 2020 will continue to monitor the implementation of the new laws in practice.
Carey Olsen's taxation and economic substance services
Members of our taxation and substance team advise clients across all sectors on various local tax matters, including tax residence, economic substance requirements, income tax, FATCA, the OECD's Common Reporting Standard and tax disputes.
For advice on the application of economic substance requirements to any specific circumstances, please contact a member of our taxation and economic substance team listed on this page.
We have also produced a set of interactive tools to establish whether the requirements apply to specific entities, which can be accessed below:
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.