Jersey Tax Exempt Income

General Principle

• In Jersey, income is generally taxable unless a specific exemption is provided by law.

Categories of Tax-Exempt Income

• Bank Interest: Interest income received by non-Jersey resident individuals from Jersey bank accounts is generally exempt from Jersey income tax.
• Certain Pension Income: Some pension income may be exempt from Jersey income tax, subject to specific conditions. This often relates to approved pension schemes.
• Income of Approved Charities: Income derived by charities approved by the Jersey Comptroller of Taxes is exempt from income tax, provided it's applied to charitable purposes.
• Collective Investment Funds: Certain collective investment funds are structured to be tax-exempt in Jersey for non-Jersey resident investors. This is a key feature of Jersey's financial services sector.
• Income of Some Specific Entities: Certain specific entities, such as some government bodies or public authorities, may have income that is exempt from Jersey income tax.

Important Considerations for Foreign Investors

• Residency Status: An individual's tax residency status is crucial in determining the taxability of their income in Jersey. Non-residents generally have a more limited tax liability.
• Source of Income: The source of the income (i.e., where it is considered to arise) is also a key factor.
• Tax Treaties: Jersey has entered into tax agreements with other countries, which may affect the taxation of income earned by foreign investors and can prevent double taxation. The specific provisions of any applicable treaty should be reviewed.
• Economic Substance Requirements: While not an income tax, it's vital to note that Jersey has economic substance legislation. Companies carrying on certain activities must demonstrate that they have sufficient economic substance in Jersey, even if their income is otherwise tax-exempt.
• GST: While this discussion focuses on income tax, foreign investors should also be aware of Jersey's Goods and Services Tax (GST). Exemptions for GST are separate from income tax exemptions.