Crown Dependencies Release Revised Joint Guidance On Economic Substance Legislation

Earlier today, the tax authorities of Guernsey and Jersey (along with the Isle of Man) released revised joint guidance on the application of each island's economic substance legislation. This guidance updates the previous joint guidance issued by the Crown Dependencies on 26 April 2019.

Economic substance legislation has effect in both Guernsey and Jersey and applies to companies that are tax resident in those jurisdictions and generating gross income from relevant activities in a financial period commencing on or after 1 January 2019. In Guernsey, certain exempt companies have also been in scope since 1 August 2019.

The revised joint guidance provides welcome details for aiding compliance for current and future periods. In particular, it has been expanded to cover insurance, intellectual property, high-risk intellectual property and shipping. Existing sections on the directed and managed requirement, fund management, distribution and services centres and (pure