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Jersey: Domestic Corporate Taxation

Withholding Tax

Withholding tax was not imposed on dividends, but they were deemed to have borne income at 20% for a resident company, or at the lower rate payable by an international business company. Income tax was deducted at the standard rate of 20% from any payment of interest, royalties or annuities by a Jersey 'income tax' company, to either a resident or a non-resident. An exempt company or an IBC was not obliged or entitled to deduct tax when paying interest or royalties to non-residents. For all companies, interest and royalty payments were deductible as trading or management expenses when calculating the profits chargeable to income tax, although mechanisms varied; however there were some limitations on the deductibility of interest paid abroad by resident 'income tax' companies.

Under the EU's Savings Tax Directive, withholding tax (known as a retention tax) is deducted from interest payments on savings made to people resident in EU member states, as from July 1, 2005, initially at a rate of 15%, (20% from July 1, 2008 and 35% from July 1, 2011).

NB: The 0/10% tax regime applies as from 2009.



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